Published On: Fri, Oct 4th, 2019

Global recession fears: £95BILLION wiped off FTSE hitting savers’ pension investments | City & Business | Finance

Around £95bn has been wiped off the value of London’s biggest firms over four days of heavy losses including a 3.2 percent wipe-out on Wednesday. Pension investments took a massive hit as the political turmoil in Westminster looks to have taken took its toll on the markets and raised the possibility that the British economy shrank overall in the past three months.

Boris Johnson’s Brexit proposals have failed to ease market fears of a no deal departure and a survey showing an unexpectedly sharp downturn in the dominant services sector last month show signs the economy has slipped into a recession. analyst Neil Wilson said: “There’s precious little positivity around UK stocks – Brexit uncertainty, profit warnings aplenty, CEO purges, weak UK data and a slowing macro picture for the heavy weights exposed to global growth adds up to a pretty disappointing near term outlook for the FTSE.

“That’s far too pessimistic, one feels, but it could explain why the selling has been so abrupt.”

The FTSE 100, which was nearly 150 points below its 200-day moving average at early doors today, has lagged other major markets this year, underlining the additional turmoil brought on by political uncertainty.

It was a similar story across Europe with moderate gains in the Euro Stoxx 600 index after a bumpy week although benchmark indices in Germany and France have only edged up.

And there is cause for concern from farther afield with financial data from Europe and the US giving little doubt the US-China trade war has constricted worldwide growth and slammed the brakes on the global economy.

READ MORE:Deutsche Bank CEO fears central banks have no tools left to ‘cushion’

Mr Haefele said: “Without a resolution to the US-China trade dispute, we see limited upside for stocks in the near-term, and given the risks of further escalation we hold a modest tactical underweight on equities.”

One silver lining for investors could be the growing hope that central banks will step in with further stimulus.

The Federal Reserve – the world’s biggest central bank – has already cut interest rates twice this year.

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