FTSE 100 opens 60 points higher

Published: Thursday 16th October 2014 by The News Editor

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A jittery stock market recovered some of its losses today after the worst session in more than a year wiped £46 billion from blue-chip shares.

The FTSE 100 Index opened 1% or about 60 points higher, although traders warned there was no change in the uncertain mood after the City was rocked by a slump of 2.8% or 181 points in trading yesterday.

Poor US economic data and uncertainty over the future of Greece’s bailout plans have added to fears over the world economy, particularly in Europe.

London’s leading share index had climbed above 6900 to reach near record highs at the start of last month, but during yesterday’s session it fell to nearly 700 points or 10% off that level as it sank as far as 6225.1.

Stocks have been pummelled in recent weeks by fears that the beleaguered eurozone may fall back into recession as its largest economy, Germany, has reported a fall in exports and slashed growth forecasts.

Figures from the US yesterday added to the anxiety, with retail sales for September down 0.3% on the previous month and other key data on manufacturing and business inventories cementing the gloomy picture, prompting steep falls on Wall Street.

Michael Hewson, chief market analyst at CMC Markets, said the end of monetary stimulus in the United States had provided a reality check for markets.

He said: “As the monetary morphine has started to wear off the patient has come to realise that a lot of the old problems still remain, and yesterday’s poor US data helped trigger a rather extreme reaction in not only the stock markets but bond markets too, as complacent investors rushed to hedge themselves.

“In essence, investors are asking the question with respect to the recent recovery about whether this is as good as it gets, which rather explains the slump in the oil price, bond yields and stock markets.”

Published: Thursday 16th October 2014 by The News Editor

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