Trading floors fight freefall

AS THE dealing floor at IG Group waited nervously for the “US open” at 2.30pm yesterday after Friday’s carnage in the global markets, the atmosphere was surreal.

The trading floor was eerily quiet as Dow Jones opened down almost 220 points on the close of Friday, punctuated by the occasional “excellent” in the voice of Mr Burns from The Simpsons – an automated response woven into IG’s trading software.

But – despite all-too brief rallies – there was nothing “excellent” about yesterday’s crazily zigzagging markets, on a par with October 2008 as the most volatile David Jones, IG Group’s chief market strategist, has seen in his eight years in the City.

“There was relentless panic selling then and it is the same now,” said Jones, reaching for his Nicorette gum. “There has been day after day of massive selling, with falls leading to more falls. The debt is bad and the economies aren’t growing – there is nothing positive to report.”

Watching the FTSE fall a further 25 points, he added: “It is a tale of short-term lifts that are smashed down again. Any good news is short-lived.”

The carnage has, at least, translated to higher trading and deal volumes. Last Friday, IG hit more than two billion shares traded on the FTSE 100, rounding off a bumper week where it took 1.25m client deals.

“We are breaking pretty much every record we have,” said IG Index managing director Tim Hughes, reporting an “adrenaline rush” on the dealing floor as the traders watch the “events of global significance”.

So where now? “It’s difficult to see a way out for Italy, but the US dollar will remain the global reserve currency in the short- to medium-term.”