Global rally stumbles
Markets slide as investors fret over Trump delays
The FTSE 100 this morning opened 50 points lower, following a slide on Wall Street where shares fell by more than 1% for the first time in 109 business days. It was the worst session this year as the rally which has pushed markets to record highs looked in danger of fizzling out.
The Dow Jones Industrial Average dropped 1.14% to end at 20,668.01 points, while the S&P 500 (.SPX) lost 1.24% to 2,344.02. The Nasdaq Composite fell 1.83% to 5,793.83.
Asian stocks posted their biggest declines in two weeks. Australia’s S&P ASX 200 lost 1.56%, Japan’s Nikkei 225 stock index dropped 2% while South Korea’s Kospi lost 0.5%. Hong Kong’s Hang Seng index is down 1.4% and the Shanghai Composite index 0.7% lower.
One trader spoke of “an ugly sea of red” as so-called Trumponomics will not will not deliver the tax cuts and spending boosts that the president promised.
The Trump administration’s struggles to push through his overhaul of healthcare has been taken as a sign that he may also struggle to introduce his promised tax cuts which have been a key factor in the 10% surge in the S&P 500 since his election.
There is a growing view that markets have got ahead of the White House timetable for change and that a correction may be due.
A Bank of America Merrill Lynch survey last week revealed that 34% of investors found equities to be most overvalued of asset classes.
Others believe the markets are pausing after a surge since December and that investors have taken advantage of recent rises to take some profits.
After hitting a series of record highs since the turn of the year, and a new high on Monday, the FTSE 100 index closed down 51.47 or 0.69% at 7,378.34.