Stocks around the world showed signs of slight recovery except for Europe where the markets hit a record low. The fear of looming global recession heightened the investors’ insecurity, causing major sell-out in the market. With markets turning volatile especially in Europe, investors are moving towards safer options such as gold, and cryptocurrency. Gold went up by 40 cents, reaching $1,528.20 per ounce.
Besides stocks, investors are also turning wary of bonds, as on Wednesday, the yield on 10-year US treasury bond went lower than the 2-year bond for the first time since 2007. UK also witnessed similar inverted yield curve for the first time in over a decade. It implies that investors want more returns for short-term government bonds as compared to the long-term ones. It is seen as one of the major signs of emerging recession.
Stocks across Europe dipped except for Denmark and Russia which escaped the trend by a narrow margin. The S&P Europe 350 Index dipped more than 1.5%. Britain, France and Germany felt the worst jitters of the tumbling markets. The index of Britain’s top 100 companies fell by more than 1 per cent, hitting a six-month low.
On Thursday, London’s FTSE 100 closed 1.1% down at 7,067, it was the lowest it went since February, while the German Dax dropped 0.7% and the French CAC 40 slumped 0.3%, taking European markets to a six-month low. Similar trend followed in Japan, where the Nikkei 225 plummeted 1.2%, earlier in the day.
The fear of Germany falling in the grip of recession increases as it reported a negative growth in its last quarter. If Germany, which one of the major economic powers of Europe, goes down a lot more in Europe are bound to fall.
In China and Hong Kong, though the indices remained in positive territory but Beijing’s industrial growth remained at 17-year low amid the escalation trade tensions between US ans China. Hence the fear of global recession, has been keeping the investors anxious.
Global markets are hoping for a better outcome, yet anxious with another round of US-China trade talks resuming in September. Both the economic powers are keen on striking a deal but China hinted of retaliation against additional tariffs levied by US. China’s foreign ministry spokesperson used a softer tone, while put out the message that China hopes to “meet the U.S. halfway” to resolve trade concerns.