Financial Spread Betting Markets Plunge on Global Growth Fears
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For today's update see Spread Betting Daily.
The Daily Update from Anthony Grech, Research Analyst, IG Index.
Spread Betting 19 August 2011: 6.00am Update
On Wall Street overnight, the bears returned aggressively as very disappointing US economic data and fears over the stability of European banks had traders reaching for the sell button.
The tech-heavy NASDAQ was the worst performer - losing 5.2% - while the S&P 500 and Dow Jones Industrial Average fell 4.5% and 3.7% respectively.
Asia & Australia
Across Asia, regional markets are all sharply lower following the negative leads from European and US equity markets overnight. The heavy selling is on the back of fears over the state of global economic growth, and the ability for European banks to withstand another freezing over of credit markets.
The Hang Seng is the worst performer - down 2.3% - while the Nikkei 225 and Shanghai Composite are 2.1% and 1.3% weaker respectively.
In Australia, the ASX 200 is currently 2.7% weaker at 4135 having traded down to an intraday low of 4119. Given the bloodbath seen across global equity markets overnight, it is not at all surprising to see the Australian market experiencing sharp and broad-based losses.
The heaviest losses are being witnessed across the energy and consumer discretionary sectors - both down nearly 4% - while the heavyweight materials and financial sectors are seeing declines of nearly 3%.
Europe
Massive concerns over the outlook for the global economy saw financial spread betting markets decimated on both sides of the Atlantic during Thursday’s session, dashing traders’ hopes that we’d see a quiet second half of the month.
Although the selling hasn’t been quite as severe in Asia, the theme is definitely one of shunning risk, so gold continues to push toward that $2000/oz level whilst crude oil spread betting prices tumble too.
Modest losses are expected at the open in Europe, but there’s little reason to believe we’re going to see any sort of rebound ahead of the weekend break now.
There are a couple of economic releases that will be under scrutiny again today, including German Producer Prices and UK public sector borrowing but, as has become the way this month, these alone are unlikely to carry much momentum in the grand scheme of things.
There’s not much to report on the earnings calendar so ahead of the open we’re calling the FTSE down 39 at 5053, the DAX down 26 at 5577 and the CAC down 21 at 3055.
Remember that financial spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.
The above comments do not constitute investment advice and neither IG Index nor SpreadBets.org.uk accept any responsibility for any use that may be made of them.
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"Financial Spread Betting Markets Plunge on Global Growth Fears" last update by AG, 19-Aug-2011
Warning: Financial spread betting carries a high level of risk. You can lose more than your initial investment or stake. Financial spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.
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