World Markets LIVE: FTSE plummets 6%, Dow rallies – experts warn ‘not out of woods yet’

The UK-based FTSE 100, the share index of the 100 companies listed on the London Stock Exchange with the highest market capitalisation, has today sunk 5.4 percent by 313.31 points to 5,502.42. The stock market has rallied this week after experiencing sharp falls over recent weeks, before dropping again since opening this morning, but still set to end the week 300 points up. Fiona Cincotta, an analyst at City Index, said: “The FTSE has opened on the back foot, snapping three straight sessions of gains.”

But she said it still leaves the index on course for a gain of around 10 percent since last Friday – its first week in the green since early February.

She added: “The big question is whether this is a false floor or whether it is the start of a more meaningful advance.

“The awful data is only just starting to show through. Chinese industrial profits slumped by the most on record. Italian and French consumer confidence is expected to plunge.”

The Dow Jones Industrial Average, which measures the stock performance of 30 large companies listed on stock exchanges in the United States, has surged more than 20 percent this week.

It plummeted more than 300 points during early morning trading but has bounced back to 21,670.14, and is on course for its biggest weekly gain since 1938.

But Ryan Detrick, senior market strategist at LPL Financial, tweeted: “We aren’t out of the woods quite yet.”

He warned the bear market in 2008 and 2009 saw a 27 percent rally before plummeting massively by 56 percent.

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4.34pm update: EU leaders’ talks on coronavirus stimulus package collapse

The bloc’s leaders have failed to agree on a joint strategy for a stimulus package as the coronavirus outbreak blows huge holes in leading economies.

Germany and the Netherlands blocked a call from France, Italy and Spain to issue joinjt bonds to help finance a recovery.

The EU27 are also at odds over setting up a credit line worth two percent of their economic output from the European Stability Mechanism bailout fund of the 19-member single-currency zone.

They have now told their finance ministers to finalise the details within the next two weeks.

4.23pm update: Traders fear more huge fluctuations in global markets

The accelerating coronavirus outbreak is sparking fears of a deep global recession.

This has seen traders to warn of more wild swings in financial markets until there are signs of new cases peaking, and sweeping restrictions placed on entire countries being lifted.

Neil Wilson, chief market analyst at Markets.com in London, said: “Big questions are starting to be answered, like how bad is the spread of infections (and) how bad is the economic damage.

“That is a recovery narrative, not panic, but if a recovery is not as swift as hoped, equity markets will suffer another hit.”

4.13pm update: US Stock market warning over opening of economy

Nick Raich, CEO of The Earnings Scout, told clients Thursday: “If you believe the economy will be (opening) back up soon, buy stocks now.

“However, if shutdowns persist into May and June, stock prices will need to reset even lower to reflect even more lost growth.”

4.10pm update: Analyst unsure which way FTSE is heading 

Fiona Cincotta, an analyst at City Index, said: “The big question is whether this is a false floor or whether it is the start of a more meaningful advance.

“The awful data is only just starting to show through. Chinese industrial profits slumped by the most on record. Italian and French consumer confidence is expected to plunge.”

4pm update: Market strategist urges caution over Dow Jones rally

The Dow Jones has surged more than 20 percent this week. 

The US stock market is on course for its biggest weekly gain since 1938. 

But Ryan Detrick, senior market strategist at LPL Financial, warned: “We aren’t out of the woods quite yet.”

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