Global stock markets have fallen in anticipation of today’s US Federal Reserve meeting which could lead to an interest rate hike.
US markets fell sharply last night and European markets initially followed suit this morning before rebounding.
The Dow Jones, the S&P 500 and the Nasdaq Composite all fell more than two per cent last night - to 14-month lows - as another US selloff spread its way towards the European markets.
The FTSE 100 fell 0.8 per cent in early trading but rebounding slightly to 0.35 per cent down and France’s CAC also dropped 0.1 per cent.
“Tentative signs of recovery are in evidence across equities in Europe, while US futures have begun to look more encouraging after yet another heavy days of losses,” IG analyst Chris Beauchamp said.
“The only question is whether a rebound will begin ahead of the Fed decision tomorrow, or whether another quick flush is due before tomorrow’s widely-expected rate hike.”
The US central bank is expected to raise interest rates by 0.25 to a range of 2.25-2.5 per cent - the highest level in a decade.
But it has come under intense pressure from President Donald Trump, who has warned against another hike.
“It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris burning and China way down, the Fed is even considering yet another interest rate hike. Take the victory!” Trump wrote on Twitter yesterday.
Asian markets also suffered with Japan’s Nikkei down 1.7 per cent and Hong Kong’s Hang Seng Index falling 1.05 per cent.
A highly-anticipated speech by Chinese president Xi Jinping failed to lift the markets earlier today.