So the markets geeks, chartists and teenage scribblers think the FTSE 100 has entered bear market territory, finishing today’s session down 3.46% at 5673, having yielded a short £149 billion since the start of the year (circa 20%). Despite the carnage with blood running down Threadneedle Street and Canary Wharf, I am not a prophet of Doom. I believe that this correction, though very painful, is very healthy and overdue. With so many imponderables relating to the Chinese economy, global growth, interest rate uncertainty, the threat of deflation leading to cut margins and falling profits, no one can be that surprised at the vehemence or strength of the sell-off.
Starting with oil, that sector surrendered 6% with Royal Dutch Shell which posted a 50% drop in profits, losing 7%. BP eased by 5% and BG Group by 3.7%. Mining stocks were trashed – BHP -6.5%, Anglo American -8.5%, Glencore -7.5%. Randgold bucked the trend thanks to gold being in demand as a flight to quality – +2.5% – one of 2 stocks to finish in positive territory, the other being Sports Direct Direct +1.5%. Drugs were down 3% and banks by an average of 5%. This is a bloody battlefield with few winners. In New York is down 479 points at 5.15pm – just over 3%!