Extreme volatility rocks markets

“Having suffered its worst day of trading in more than 30 years the FTSE 100 at least started Friday 13th in positive territory, although a 6% rise at the open began to be whittled away as the morning progressed,” says AJ Bell Investment Director Russ Mould.

“The day was definitely still unlucky for some, cruise operator Carnival was one of the few large cap fallers as investors reacted to the UK Government advice for over 70s and people with underlying health conditions not to take cruises. BT CEO Philip Jansen has become the latest high profile figure to confirm he has contracted the virus.

“The story in Asia Pacific markets overnight was one of extreme volatility. Aussies stocks endured a real boomerang of a session – the more than 12% swing from its low point to an eventual 4.4% gain reflects just how frazzled investors are just now. Asia also saw see-saw trading – with most markets ultimately rebounding from their lows.

“The VIX volatility index suggests markets are as jittery as they have been at any time since the financial crisis.

“Stimulus from the Australian authorities and the US Federal Reserve’s $5 trillion cash injection are further signs that central banks are ready to do everything they can to restore calm. While regulators are also intervening with the UK’s financial regulator banning investors from shorting certain European stocks.

“However, European Central Bank chief Christine Lagarde’s unguarded comments yesterday suggests more help is needed from global governments too,

“Oil prices were higher, up 3.5% at a little more than $33 per barrel, but gold retreated a little to $1,582 per ounce.”

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