Volatility in response to coronavirus continues to create unstable markets
FTSE surges 6% in early morning trading
- FTSE up by over 6% this morning
- Yesterday marked the biggest one day fall since the ’87 crash
- For investors wishing to take a punt now, they may be rewarded over the medium to longer term
- Those of a more nervous disposition may just want to sit tight until the volatility dies down
In my 20+ years in the industry I find it difficult to remember another week of such momentous moves. We had some big moves during the financial crisis and sovereign debt crisis and the odd flash crash, but they never had the extreme one day moves as we have had this week. Following yesterday’s biggest one day fall since the ‘87 crash, this morning the market opened up by over 6%. This can be attributed to no new drastic measures being taken by governments around the world in regards to containing the virus outbreak. Some investors may ask whether this is the bottom, which it could be, but seasoned traders and investors will merely see it as a dead-cat bounce.
The question is whether markets can hold on to these levels through the day. That may be hard to do as nervous traders and investors will not want to hold positions through the weekend, especially after what happened over the last weekend, and we may see some selling action again towards the end of the day. For investors wishing to take a punt now, they may be rewarded over the medium to longer term. Those of a more nervous disposition may just want to sit tight until the volatility dies down.
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