Tuesday’s global market rally, triggered by US President Trump’s postponement of tariffs against Chinese goods, was short lived. Trump changed tack with tweets yesterday calling for a ‘humane’ resolution to the Hong Kong protests from the Chinese government, which could translate into further market weakness in general, and for the Hang Seng in particular.
US and Asia stock markets have mostly dropped sharply, on confirmation that China’s economy is slowing down. US bond markets are flashing recessionary signals, with the inversion of the yield curve. European stocks opened down this morning, Italy, in the grips of renewed political turmoil, saw the FTSE MIB also fall.
Financials in distress
The FTSE100 fell -1.42% in the previous session, dragged down in particular by financials suffering from adverse market conditions. Royal Bank of Scotland shares slumped -7.48%, while Standard Life Aberdeen, Phoenix Group, Aviva and Legal & General all lost more than 2%.
Sustaining the FTSE benchmark was software business Micro Focus International, which gained 2.11% on news of a $200 million share buyback programme. British American Tobacco was up 1.75%, as investors saw value in its takeover of e-cigarette maker Twisp.
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