FTSE 100 futures are trading 3% lower after market close as second wave fears mount, suggesting that the blue-chip index will extend losses when the market reopens on Thursday.
Over the last three trading sessions this week the FTSE 100 has lost 2.5% of its value, with blue-chip stocks having a terrible time of it on Wednesday, closing 3.11% lower to 6123 points.
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Global stocks uneasy recovery as second wave fears mount
Global equities continue to face an uneasy recovery, with stocks taking a tumble on Wednesday amid mounting fears of a second wave of coronavirus cases as governments ease lockdown restrictions.
In the US the S&P 500, Nasdaq Composite and Dow Jones indexes all closed more than 2% lower on Wednesday. Meanwhile in Europe the Euro Stoxx 50, German DAX and French CAC 40 all closed in the red.
‘Coming off the back of a huge market recovery in the months following the March low, we are finally seeing markets wake up to the obvious risks of getting too carried away at the first sign of a recovery,’ Joshua Mahony, senior market analyst at IG.
‘We are used to the Federal Reserve or Trump administration stepping in at every turn, but that reliance is certainly not A healthy reason to buy stocks.’
FTSE 100 still tiptoeing higher
The FTSE 100 has succeeded in eking out some higher highs, but it is the steady progression of higher lows that should provide some comfort for the bulls, according to Chris Beauchamp, chief market analyst at IG.
‘After rallying towards 6350 the price has come off, but the uptrend is still in place, and a higher low above 6200 should provide another possible entry point for longs,’ Beauchamp added.
‘A reversal below 6150 would likely spell the end of the current bounce and given the shallowness of the gains over the past week, this index could easily move into a more bearish phase.’