Markets Trading In Red: Global Growth Worries Could Impede Investors’ Sentiments

  • Jan 22, 2019 GMT
  • Team Kalkine
Markets Trading In Red: Global Growth Worries Could Impede Investors’ Sentiments

It seems like the worries related to the global growth have again started weighing over the sentiments of the global market players after the weakness which was observed in the Chinese economy. The slower growth from the big economy like China is indeed a matter of concern for the global market players. The investors’ fears were further increased when IMF or International Monetary Fund increased the worries about the outlook for the global economy. This announcement coupled with the weaker growth of the Chinese economy significantly impacted the sentiments. Moreover, the International Monetary Fund had also reflected increased tensions for the emerging economies as well.

On Momaday, British Prime Minister Theresa May presented her Plan B on Brexit in front of the UK parliament, and the centre point of May’s Plan B was altering ‘Irish backstop” the safety net framed to eschew hard border on the island side. She vowed to look for changes with EU lawmakers on “backstop.” Both the EU bloc and the UK have firm belief that hard border checks could put peace process at risk. The British Prime Minister also discarded the GBP 65 fee that European citizens were liable to pay to secure the right to resume living in the UK post-Brexit. Post Theresa May speech, Michel Barnier, EU’s chief negotiator immediately refused to renegotiate on Irish backstop with the UK and mentioned that Prime Minister should focus on the more ambitious future relationship with EU bloc rather than seeking renegotiation on Irish backstop.

Meanwhile, GlaxoSmithKline Plc has informed London Stock Exchange that Philip Hampton, Non-Executive Chairman at GSK, has told the board of his intention to step down as non-executive Chairman. Shareholders praised Philip for bringing Emma as CEO at GSK. As part of GSK’s succession planning, the Board has started the process to find a successor.

On 22nd January 2019, Office for National Statistics reported steady growth in the UK’s employment. Workers’ wage growth hit a 10-year high and employment grew much more than anticipated in three months to the end of November’18, despite uncertainties around Brexit deal, the labour market remained robust. Employment rate between September to November between 16 to 64 years including men and women was 75.8 percent, record high since estimate began in 1971.

However, the market players need to carefully place their bets on the equities largely because of the growing uncertainties as well as slowdown in the Chinese economy. Also, the uncertainties related to the Brexit might impact the European markets. At the time of writing the European markets were trading lower as FTSE 100 Index was seen at a lower level and STOXX 600 was trading at 355.42 which reflected a fall of 0.39%. FTSE 100 closed at 6,901.39, down 69.20 points (0.99%). In fact, all key FTSE indices were down.

With market close, GBP/USD was trading at 1.30, edging up slightly and EUR/GBP was trading at 0.88, down slightly. British Pound surged from 1.283 against the US dollar before the UK’s jobs data released to a high of 1.292.

Stocks like EasyJet Plc (EZJ.L), Ocado Group Plc (OCDO.L), Kingfisher PLC (KGF.L) are among the top gainers on FTSE 100 index and up by 6.28%, 3.32% and 2.02%, respectively. On the other hand, stocks including Wood Group Plc (WG.L), EVRAZ Plc (EVRE.L) and GVC Holdings Plc (GVC.L) were among the laggards on FTSE 100 index and down by 4.1%, 3.5%, and 3.02%, respectively.

During the day, sectors which dragged down FTSE 100 Index into red were Energy, Base metals, Healthcare and Financials. Almost every sector traded in red on FTSE 100 index.

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