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Markets begin fightback after disastrous start to the week's trading

Investors dump stocks to push global markets lower

US markets fought back on Tuesday after enduring record losses 24 hours earlier. Both the Dow Jones Industrial Average and S&P 500 fell by more than 3% on Monday as investors moved to sell of stocks. 

 

Tuesday continued in the same vein across all global markets with the UK's FTSE 100, Germany's DAX 30 and France's CAC 40 all opening considerably lower at 9am. But, as the day continued, markets stabilised and US stocks picked back up again. 

 

Experts moved to dismiss fears of a crash after Monday's results. Jane Sydenham, an investment director at stockbrokers, Rathbones, said "What we have to remember is stock markets have had a very smooth ride upwards and we've not had a fall of more than 3% for 15 months. There's been a real lack of volatility, which is very unusual." 

 

The portfolio manager for S&P Global Market Intelligence, Erin Gibbs, added "This isn't a collapse of the economy. This is concern that the economy is actually doing much better than expected and so we need to re-evaluate." 

 

Monday represented the worst day experienced by the S&P 500 Index since March 2011 and Ed Keon, portfolio manager at QMA, suggested there may be some patterns between the current volatility and that experienced in 2011. 

 

Keon said, "Maybe if you went back and looked at August 2011, you might see a worthwhile parallel. You had a sudden sharp drop, it was volatile for a while and the bull market could resume. I'm not saying today is the all clear signal, and there's no worries. I am saying the worst is probably over. I wouldn't be adding to my equity exposure if I didn't see it as a good time." 

 

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