Markets Tumble on US Inflation Nerves

The FTSE 100 saw its worst morning this year pending news due tomorrow on US inflation as tech stocks brought down global markets.

The blue-chip index down more than 2% as markets opened.

Natwest fell as much as 5.4% after £1.1 billion of its shares were sold at a discount by the Government.

All but one of the FTSE 100 constituents were trading in negative territory with banks and miners among the largest losers.

The mid-cap FTSE 250 also fell by over 2% as both indexes tracked their worst daily performance in 3 weeks.

The largest drop was in tech stocks on global markets as fears the central banks could tighten monetary controls.

Tech giants including Facebook, Amazon, Apple, Netflix, and Google dropped 3.6% on Wall Street last night and Electric car behemoth Tesla dropped 6.4% with google also down 2.5%.

Concerns that Beijing will crackdown on tech saw Chinese tech giants Baidu, Alibaba and Tencent (knows as BAT) dropped more than 3%.

After chief executive of the food app Meituan posted an ancient Chinese poem on social media, Meituan dropped 10% losing $30 billion of its market value.

Meanwhile Sainsbury’s were up 0.16% and RSA Insurance remained flat.

The largest fall was engineering firm Renishaw dropping 6% followed by British Airways owner IAG down 5.8%.

Melrose Industries fell 5.5% and Royal Dutch Shell 4.2%.

After a sell off on Wall Street Asian tech stock fell as investors prepared for US inflation data.

The Hang Seng index dropped 3% after heavy selling in Hong Kong and brough the broader market down nearly 2%.

European early trades saw the pan-region Euro Stoxx 50 futures down 2% whilst Germany’s DAX dropped 2.1%.

The S&P 500 e-minis were also down 0.7% and the Nasdaq 100 fell 1.3%.

Comment

Inflation is, in our opinion, the only way governments are going to repay covid-19 debt.  They are going to devalue it before repaying said debt back over the next 20 or 30 years.