FTSE hits longest losing streak since 2003
Meanwhile the Dow Jones in the US fell by over 1,000 points when it opened yesterday, though it has since made back some of this ground.
The FTSE 100 has now shed more than 10% of its value in 10 trading days.
Laith Khalaf, Senior Analyst, Hargreaves Lansdown:
‘The summer slump continued into its third week as global stock markets sold off once again. Here in the UK the Footsie has been decimated in ten days, as fears over global growth have gripped international investors.
China and commodities are still dominating proceedings, with oil and mining companies once again bearing the brunt of poor sentiment, though the banks aren’t far behind.
It was just five months ago investors cheered as the Footsie broke through the 7,000 mark for the first time; it now looks like a very long climb back.
However bleak things may seem today, there are reasons to be positive. A lower oil price will boost household budgets in the UK, Europe and the US, which should feed through into spending. The $70 dollar fall in the oil price over the last year puts $6 billion more into the pockets of oil consumers each day; a level of economic stimulus even central bankers would be proud to notch up.
Furthermore as long as lower petrol prices are keeping inflation down, central banks in the UK and US are unlikely to raise interest rates, providing a supportive background for companies and consumers. This probably further extends the pain for savers, who can probably see that light at the end of the tunnel receding into the distance.’