- FTSE 100 171 points lower at 8,000
- Nasdaq down 600 points, 3.5%
- FTSE 250 down 3% as Wood Group slides 38%
3.56pm: FTSE 100 to close out worst session in year
London's FTSE 100 has appeared to show some signs of resilience at the end of today, but today's session remains its worst of the year and takes the index to its lowest point since mid-April.
Shares in the City's lead index fell more than 2%, around 175 points, to near the 8,000 mark.
Some of the biggest fallers included the tech-heavy Scottish Mortgage Trust, down 7%, Melrose, down 6.8%, and Fresnillio, down 6%.
Only Haleon and B&M have registered movements in the green, with Reckitt lingering around the flat mark.
Over in the US, the Nasdaq was slammed by 600 points, while the S&P 500 shedded over 3%.
Jeremy Siegel, professor emeritus of finance at the University of Pennsylvania’s Wharton School, floated the idea of an emergency rate cut in a CNBC interview today.
He called on the Federal Reserve to immediately cut rates by 75 basis points, plus another 75 points at the next Monetary Policy Committee meeting in September.
All of the US's Magnificent Seven experienced share declines today, with Apple dropping close to 5%, while Nvidia slumped 6.5%.
The remaining seven dropped by low-to-mid single digits.
3.36pm: Currencies and commodities today
The FTSE 100 is looking as if it has found its floor, for today at least, at around 7,991, which is a nearly 200-point drop from Friday's close.
While markets in countries across the world are hit, here's a look at how currencies and commodities have performed in reaction:
- Bitcoin/USD: -9.5% at $52,640
- GDP/USD: -0.2% at $1.275
- GDP/EUR: -0.7% at €1.163
- EURO/USD: +.5% at $1.096
- Brent Crude: -0.5% at $76.25
- WTI Crude: -0.9% at $72.85
- Gold: -2.1% at $2,389
- Silver: -5.3% at $27.00
3.07pm: FTSE risers today
While the FTSE 100 continues to suffer its worst session in recent times, dropping 2.5%, there are a handful of companies which have been able to buck the bearish trend.
Out of London's blue chips, only Haleon and Reckitt have been able to lift into the green, up by 0.1% and 0.4% respectively.
Haleon had previously showed resilience last week after its interim results, with analysts at Deutsche Bank highlighting its dependability during tough markets.
“The stock has been strong into results and the positive margin performance, along with some low season improvement in a respiratory sell-out, is supporting the stock.
“However, Haleon is delivering in a sector where performance is very mixed and it should be modestly up today even after the recent rise, in our view."
Reckitt's strength in the face of a downturn may be due to the fact it is currently trading at around a ten-year low, indicating that its floor has already been hit.
Its shares have been under pressure due to the overhang of potential litigation regarding its baby formula division, with allegations that it put premature infants at risk.
Risers in the FTSE 250 included Ruffer, the investor particularly focused on bonds, and Wizz Air.
2.40pm: US stocks plummet
US stocks have opened sustainably lower today, beginning what may be the worst session for Wall Street in recent years as the current global sell-off continues.
The Nasdaq saw 5.5% of its value lost on Monday, with the tech-heavy index appearing to have suffered the worst from the dip in the megacaps.
The Dow Jones dropped around 3% to 38,522, while the S&P 500 dropped 3.7% to 5,146.
Kellonova, the owner of Pringles and other snack brands, was one of the only risers today, lifting close to 17% after it was reported rival Mars was interested in purchasing it.
The group prior to today had a value of about US $27 billion including debt, having risen by around 20% since it was spun out of Kellogg's last year.
Neither party confirmed the deal with the report suggesting other parties might be interested.
1.50pm: Mag Seven sheds US$2.3 trillion since July
As the Nasdaq readies to shed close to 1,000 points at the open, analysts at AJ Bell have noted that trillions of the Magnificent Seven's value has been lost since peaking.
Some US$2.3 trillion of the seven megacaps' market capitalisation has been removed since it peaked in July, but the companies values still represent a third of the S&P 500's value and a fifth of the global stock market.
"There are two ways of looking at the summer stock market stumble. Bulls will see it as a hiatus and no more during the traditionally stale period where major players sell in May and go away, returning on St. Leger Day in September, while bears will argue this is the start of a long overdue reckoning for markets where buybacks, borrowing on margin (or in yen) and central bank largesse are providing liquidity to overvalued, overhyped risk-on assets,” said AJ Bell investment director Russ Mould.
"The fight is on. Bulls will note without undue concern that the aggregate stock market valuation of the Magnificent Seven is only back to where it was in June and the NASDAQ is at levels seen as recently as late May.
"Bears will say that someone, somewhere has lost $2.3 trillion on the Mag7 since May, while the NASDAQ is just 5% above where it was in November 2021, before the AI hype machine moved into top gear."
1.32pm: Wall Street to plummet at open
Escalating recession fears and a tepid tech earnings season are set to cause havoc on the US stock market today.
Pre-market data points to losses across the board, continuing on from a poor trading session on Friday when markets reacted to a concerning July jobs report.
According to Bureau of Labor Statistics non-farm payroll data, 114,000 jobs were added to the US economy in July - well below expectations for 175,000.
Unemployment climbed to 4.3% over the month, the data showed, hitting its highest level since October 2021.
Some of the biggest losses will be felt in the technology sector, with the Nasdaq 100 expected to shed 1,025 points when trading commences.
Apple Inc (NASDAQ:AAPL, ETR:APC), which managed to stave off the worst of last Friday’s repricing, is expected to fall around 9%, while Nvidia Corp is tipped to fall over 14%.
All other Magnificent Seven tech stocks are expected to shed low to mid-single digits.
1.06pm: Rate cut and recession bets grow
US economists are now predicting that there will be a 50% chance the country falls into a recession after the Federal Reserve decided to keep interest rates unchanged last week.
Traders are also pricing in a 100% chance that the US central bank will drop rates from 23-year highs of 5.5% to 5.25%, before reducing it further to between 4.75% and 5%.
Goldman Sachs analysts believe the likelihood of a recession in the US is now 25%, while JP Morgan has predicted a 50% chance.
Michael Feroli, the JP Morgan economist, said: "Now that the Fed looks to be materially behind the curve, we expect a 50 basis point cut at the September meeting, followed by another 50 basis point cut in November.
"Indeed, a case could be made for an inter-meeting easing, especially if the data soften further."
12.49pm: Rolls-Royce looks to fundraise
Roll-Royce shares are down close to 6% today, and while this is the case for most stocks today, it comes after the group announced a planned fundraiser for its mini nuclear reactor business.
The London-listed engine maker is believed to be looking at a "range of options" for raising cash, according to a Sunday Telegraph report.
The FTSE 100 engine maker has received interest in buying a stake in the venture from multiple investors.
It is looking to raise fresh funds for Rolls-Royce Small Modular Reactors, where funds need to be topped up after a fundraising in 2021 raised £195 million.
Rolls' group CEO Tufan Erginbilgic confirmed the investor discussions about raising money for the venture, telling the newspaper he was "very comfortable" about the funding process as SMR "is an attractive proposition and it’s got a great future."
12.26pm: Car insurance premiums ease in second quarter
In a break from the markets, car owners in the UK have started to see costs ease after it was found that insurance premiums fell in the past quarter, the first decline in two years.
The industry trade body, the Association of British Insurers (ABI), said average motor insurance premiums fell 2% in the second quarter to June compared to the first.
This follows a 1% increase in premiums in the first quarter of this year, while compared to a year ago, the average premium in the second quarter was still up 21% than the same period a year ago.
The ABI said the cost of claims was pretty much flat, up just 0.4%, versus the first quarter, after an 8% rise in the first.
Insurers paid out £2.9 billion in motor insurance claims in the quarter, up 18% on £2.5 billion paid a year ago, though over the long term the average premium paid is 2% lower than the peak in late 2017.
12.06pm: US recession fears or tech sell-off driving the downturn?
London's blue-chip index is attempting to hold off dropping by 200 points today, but having dropped below 8,000 it puts the FTSE 100 at a five-month low.
Economists are now debating the reason why the markets are experiencing such a downturn, with a split in view between those who blame the weak US macro data, while others argue it is the cause of a tech sell-off.
George Lagarias, chief economist at Forvis Mazars, believes the latter is true.
He said: "While a US recession narrative fits the bill, we are not convinced that it is indeed driving equity markets. If anything, experience suggests that bad macroeconomic data and consequently higher rate cut expectations are more often fuel for market rallies, not pullbacks.
"The equity markets have corrected initially on the same limited tech-focused basis they had rallied in the past few months and then more broadly, due to technical factors and during a period which traditionally features low trading activity, at least from humans.
"While they may well continue to correct in the next few days or weeks, we don’t see a fundamental case for a broader equity re-rating."
11.44am: Shipping group Clarkson suffers from geopolitical tensions
Wood Group continues to drive the FTSE 250 lower after its shares shed around 38% in reaction to Dubai-based Sidara walking away from takeover talks.
However, it's not just the engineering company dropping reaction to company news.
Clarkson, the shipping services group, has dropped over 10% after it reported lower sales and profit in the first half of the year.
Total revenue for the first half of 2024 was £310.1 million, down 3.4% from the previous year.
Underlying profit before tax fell by 3% to £51.5 million, or down 4% on a reported basis to £50.1 million. Last year saw record profits.
Russ Mould at AJ Bell said: "Clarkson dropped its own pebble in the volatile pond as it revealed a drop in first half profits stemming from geo-political tensions in the Middle East.
"ts outlook was considerably brighter with the broker maintaining its full year forecast and hiking its dividend as it pointed to strong forward orders.
“But with so much global unpredictability investors are wary."
11.26am: Apple slides in premarket as Berkshire cuts stake
On Friday, Apple was the only of the US tech giants to avoid falling into the red, buoyed by strong interims which helped the shares lift 0.5%.
However, ahead of the market opening, the Cupertino-based group has dropped more than 8%, joining its Magnificent Seven compatriots in shedding value.
Making matters worse for Apple is the news that Warren Buffet's Berkshire Hathaway has pared back its stake in the firm by nearly 400 million shares in the last quarter.
It means Berkshire’s stake in the megacap has more than halved this year, although the firm still retains a significant position valued at $84.2 billion as of 30 June.
Buffett has been increasing Berkshire’s cash reserves to record levels of late, with the firm’s second-quarter earnings disclosing more than $270 million in cash and short-term US Treasury bills.
The tech-heavy Nasdaq 100 Index is expected to collapse by close to 800 points when markets open on Monday.
11.01am: Car market targets cut due to weak EV demand
New car sales in the UK for 2024 will be lower than first expected, according to Britain's automotive industry body, which pointed to weak demand for EVs as a key cause.
The Society of Motor Manufacturers and Traders (SMMT) lowered its forecasts for new car sales this year from 1.98 million to 1.97 million.
It comes despite new car sales rising by 2.5% in July when compared to a year prior, marking two years of consecutive growth in the market.
"With zero emission vehicles mandated to comprise a minimum 22% of each brand’s new car registrations over the full year, the pace of transition needs to increase significantly," the SMMT said.
Forecasts for the market share of battery electric vehicles were also lowered to 18.5%, down from 19.8%.
"Weakening private retail demand particularly for EVs and despite generous manufacturer discounts, is the over-riding concern" SMMT chief Mike Hawes said.
10.41am: Too easy to think worst case, says Mazars
While many begin to adapt to global bear markets, with tech stocks sliding, accountancy giant Mazars has remained slightly more optimistic.
Ben Seager-Scott, chief investment officer at Forvis Mazars, argued that despite fears of a US recession, it is too early to draw negative conclusions.
He said: "With expectations set high earlier this year, it doesn’t take much bad news to create sharp movements to the downside.
"However, it is too easy to be drawn to the worst-case scenario, and on the whole, we remain neutral.
"What this does highlight though is the need to look beyond a small selection of equities and markets when managing your portfolio.”
10.19am: FTSE 250 plummets as John Wood drops 37%
The FTSE 100 is closing in on a 200-point drop today, but it isn't the only British index coming under pressure today.
London's FTSE 250, seen as a better representation of the UK economy, dropped close to 3% today, shedding nearly 600 points as only four companies in the index are able to register in the green.
Leading the fallers is Wood Group, the engineering and consulting company, after its shares dropped close to 37% after its potential takeover was scrapped.
Dubai-based Sidara said it is walking away from takeover talks "in light of rising geopolitical risks and financial market uncertainty at this time".
In June, Aberdeen-based group agreed to hold talks, following a fourth bid from the engineering group, priced at at 230p per share.
After being granted access to the books for due diligence, the Dubai company, whose full name is Dar Al-Handasah Consultants Shair and Partners Holdings Ltd, was given an extension to its put-up-or-shut-up deadline to 9 August.
10.02am: Olympians not alone in going for gold
With the Olympics kicking into its second full-week, GB will be hoping for yet more golds, but they won't be alone.
Investors have been flocking to gold as a safe haven asset during the current market uncertainty, with the price of the precious metal having jumped more than 1.75% to £1,900 in the last week.
Rob Morgan, chief investment analyst at Charles Stanley (LSE:CAY), said: "The fascination and appeal of gold has stood for millennia... But gold has a special allure for many investors too.
"It tends to maintain its spending power over time, can become the go-to asset in times of crisis, and represents an ‘independent’ currency that cannot be debased.
"Gold has performed remarkably well in 2024 to date, rising by 17% despite elevated real interest rates. The explanation lies in ongoing central bank buying, strong investment flows out of Asia and resilient consumer demand.
"There are also concerns of a more inflationary environment should Donald Trump win the US election. His policies of reshoring and tariffs could stoke price rises in the world’s most important economy, and this has driven some investors to increasingly prize monetary safe havens."
9.42am: Service sector grows more than expected
Britain's services sector grew more than expected in July, providing a small boost to the markets on what is an otherwise awful day.
S&P Global's services PMI came in at 52.5 for July, up from June's 52.1 and beating forecasts of 52.4.
Importantly, the figure remained ahead of the 50 mark, which is used to separate the sector between contraction and growth.
The final composite PMI, which adds in the UK's manufacturing output, reached 52.8, up from last month's 52.3 and ahead of analysts' guidance of 52.7.
Although this signals the UK economy moving in the right direction, the FTSE 100 has failed to lift and remains close to 170 points lower.
9.27am: Scottish Mortgage bears brunt of US tech rout
Scottish Mortgage Investment Trust PLC (LSE:SMT) continues to trade lower on Monday following an exceptionally bearish Friday trading session.
The FTSE 100-listed technology-focused investment trust flopped another 5% today, in response to a sharp sell-off of US tech stocks.
SMT’s investment portfolio is heavily weighted to tech giants including Nvidia Corp, Amazon.com Inc, Tesla Inc and Dutch group ASML Holdings NV.
The tech-focused Nasdaq 100 Index is tipped to open more than 415 points lower when trading commences today, thus wiping 2.5% from the market.
9.03am: US weakness to filter into UK; emergency US rate cut?
Should the US continue on its downturn, and potentially slip into a recession, analysts believe it could have a negative read across to the UK and its growth plans.
Costas Milas, at the Management School at the University of Liverpool, said: "Goldman Sachs thinks there is a 25% risk of US recession but even very weak US growth will be equally problematic.
"In fact, brand new research... argues that weaker US growth will have a negative spillover impact on UK economic growth and, consequently, make the UK less attractive for inbound foreign direct investment (FDI).
"This should be a worry both for Rachel Reeves and Andrew Bailey: inbound FDI to the UK has been consistently dropping after Brexit which explains, partly our poor productivity performance (since higher FDI flows raise domestic productivity) and therefore undermines the chancellor’s plans to fix our public finances.
"For the BoE, these are also worrying times: I fear the MPC will have to consider cutting interest rates as soon as November, if not earlier…"
In the US, traders have begun increasing bets that the Federal Reserve will make an emergency interest rate cut in a bid the limit some damage.
Money markets have now priced in a 60% chance that interest rate setters will cut by a quarter of a percentage within the next week.
8.45am: Bitcoin takes a hammering
Bitcoin (BTC) is facing one of its worst days in recent memory becoming yet another casualty of the widespread sell-off across the global stock market.
The world’s largest cryptocurrency fell to a six-month low of $49,000 in early exchanges, before buying support kicked the BTC/USD pair back to $51,600 at the time of writing.
It still marks an 11% fall for the pair, coinciding with a drastic market correction in global equities.
For bitcoin, the sharp fall in spot prices means more than $900 million in long positions have been liquidated in the space of just 24 hours.
8.23am: Nvidia and tech sell-off driving losses
Another aspect driving the world's markets lower is the current sell-off of tech stocks, with AI darling Nvidia appearing to be one of the largest companies coming under pressure.
Elliott Management, the US hedge fund, told its investors thet Nvidia is in a "bubble" and that its share price valuation is "overhyped" - indicating that its current slide may not be recovered.
Shares in Nvidia are down more than 15% in the last month, having dropped close to 11% in the last five days.
Elliott added that US tech giants were in "bubble land" and argued that clients of Nvidia would not sustain the same demand for the group's graphics processing units.
It explained that AI is “overhyped with many applications not ready for prime time”.
Other tech stocks have also shed value since Friday, with Amazon down 9%, Microsoft down 2%, Telsa down 4.25% and Google owner Alphabet 2.4% lower.
Apple appears to be the only of the Magnicent Seven to have kept in the green, with a strong set of earnings last week keeping the iPhone maker buoyed for now.
8.08am: FTSE 100 opens at five-month low
London's blue-chip index has opened close to 170 points lower at 8,003, taking the FTSE 100 to a five-month low.
It's not just the markets suffering from the global sell-off either.
Oil prices have slipped too, with brent crude prices falling by 1% to US$76.04, taking it to near its lowest point this year.
Analysing the downturn, Bill Blain, strategist at Wind Shift Capital, has cited the low-interest environment along with a 'fear of missing out' as the driving force.
He said: "For the last decade plus the FOMO driven “stocks have risen because they are rising” mindset has been the biggest momentum driver in markets – an upside cattle-prod combining fervid speculation with the ongoing distortions of mispriced money, artificially low interest rates, QE and expensive govt bonds the financialisation of businesses, in a market seduced by a stream of fantabulous new, new things and greater than normal unbounded greed.
"Old bond dogs like me found ourselves increasingly lonely we warned market participants that low rates were not normal, and central banks weren’t there to bail out markets… If this is a crash, it will reinstall a modicum of common sense to markets…"
7.47am: Economists react
The FTSE 100 is set to start the week at its lowest point since the end of April, with the index on track to open around 140 points lower at close to 8,020.
With nearly every other market following suit, how have economists and investors reacted?
Chris Beauchamp, chief market analyst at IG said: "Markets are in absolute turmoil this morning thanks to the Nikkei 225's biggest one-day drop since 1987, which has wiped out the index's gains for the year. Volatility as measured by the Vix is at a two-year high, as the index earns its moniker of 'the Fear Index'.
"Investors continue to flee tech stocks, and the Nasdaq 100 is expected to open down 1000 points lower from Friday's close, a loss of over 5%.This is a perfect demonstration of what happens when everyone tries to sell at once."
However, Shanti Kelemen, chief investment officer at M&G Wealth, was slightly more optimistic on the BBC's Today programme: "You can pick out evidence to create a positive story, you can also pick out the evidence to create a negative story.
"I don’t think it universally points to one direction yet.”
Kyle Rodda, senior financial market analyst at capital.com, added: "The rapid move in the Yen is putting downward pressure on Japanese equities, but it’s also driving an unwind of a major carry trade—investors had leveraged up by borrowing in Yen to buy other assets, chiefly US tech stocks.
"We are basically seeing a mass deleveraging as investors sell assets to fund their losses.
"The rapidity of the move has caught a lot of investors off guard; there’s a lot of panic selling now, which is what causes these non-linear reactions in asset prices to pretty straightforward fundamental dynamics."
7.31am: What caused the global sell-off?
As the FTSE 100 and seemingly every other global market continues to take a beating, lets take a look at how we got here.
On Wednesday, the Federal Reserve decided to leave interest rates unchanged, making it one of the last leading economies to not cut.
A day after, markets were spooked by new US economic data that indicated the economy may be cooling at an unexpectedly rapid pace.
The US ISM manufacturing report, a key measure of factory output, dropped by 1.7 points in July to 46.8% indicating contraction in the industry and down from June's 48.5%.
On Friday, non-farm payrolls, an indicator of the jobs industry, came in with far fewer jobs added than expected last month, stoking fears of a country-wide recession that could be felt across the world.
With stocks appearing to be in free fall, economists and investors will be cautiously awaiting the release of several bits of macroeconomic data, including PMI's in the UK, US and EU.
7.14am: FTSE 100 to shed 85 points
London stocks are set to start the week close to 85 points lower, as the global sell-off experienced on Friday continues to affect trading.
Markets across the world closed sharply lower on Friday, with the Nasdaq dropping into correction territory following a July jobs report that raised concerns about a potential recession and the Federal Reserve's extended high interest rates.
Overnight, Asian markets have taken a whacking, with India’s Nifty 50 and Asia’s broadest index barring Japanese shares dropping by more than 3%.
Japan’s Nikkei appeared to take the brunt of the downturn, with it plummeting 12%, all but confirming the start of a bear market.
However, it was South Korea’s Kospi, down 10%, that seemed to have shown the most weakness, as trading on the lead index was halted for 20 minutes as circuit breakers kicked in.
After a big week of macroeconomic events, the first full week of August will see some important data, but not on the same scale.
Services PMI data on Monday will be closely watched in China after the manufacturing equivalent surprisingly fell into contraction territory, with eagle eyes also focused on the US, European and UK data.