FTSE indices tumbled alongside faltering US and European markets as miners took a pasting on China economic concerns and weaker spot-copper prices. Oil majors felt the pain, as did retailers and financials. Wall St fell about 1% or more.
FTSE 100 closed down 151.18 points, or 2.44%, to 6042.92. FTSE 250 was down 279.22, or 1.63%, to 16,808. Both remained off closing lows seen in late August. At 4.43pm, spot gold was at $1120/oz, and spot copper was down 2.22% to $233.15/lb. Three-month industrial metals were mostly lower. Crude was down about 1%.
Already well in the red, the Footsie eased further following weaker-than-expected US jobs data, which made it almost certain a US interest rate increase would not be happening this month.
The FTSE 250 closed 279.22 points down at 16,808.02. Wall Street traded 298.14 points lower at the outset with neurotic fund managers on both sides of the Pond in no mood to participate until they saw how the Chinese market would trend on it’s re-open on Sunday after the two-day Bank Holiday.
The Federal Reserve is data dependent and now has all the data it needs before making the critical September 17 decision on whether to raise interest rates for the first time in nine years. However, Friday’s jobs data does not make the decision easier. The Fed cannot ignore recent market volatility and the markets may create their own reality forcing the Fed to keep rates at emergency levels despite a strong jobs market.
The ECB is also concerned about the slow down in China and other emerging markets, Mr Draghi has stressed the the ECB is ready to extend the ‘size, composition and duration’ of its bond buying program to bolster growth.