Commodity-related shares again saw the biggest falls, with Kazakhmys, a Kazakhstan-based natural resources company, down 7.6% and Vedanta Resources, an Indian-based mining company, 7% lower by midday.
The FTSE 100 disappeared down through the 5,000 mark and while it has rallied since, it is still down by 6.7% since it opened this morning. The upturn was largely driven by blue chips such as Tesco, BP, Vodafone and HSBC.
Following London’s good early start, the Dow Jones and the Nasdaq both started slowly themselves, up by 13 points and 11 points respectively, though the volatility is such that the Dow Jones promptly fell by 100 points in an hour in the middle of the afternoon.
While positive market news is really difficult to come across right now – in sympathy with the rest of the investment worlds – this is the end of the third quarter and the US and UK reporting season starts in less than three weeks time.
According to Chris Alexander, head of investment strategy at BNP Paribas Wealth Management, a great deal is hinging on the credibility of earnings forecasts that will be tested in the coming weeks.
When talking about the UK, he says: “Expect a sequence of Q3 trading updates with particular focus on order books within the manufacturing sector – a sector that has been particularly weak in recent weeks and has substantially de-rated.”
