Firm risk-off atmosphere prevails

Chris Beauchamp IG

Broad losses for stocks, precious metals and bitcoin contrast with gains for oil, says Chris Beauchamp, Chief Market Analyst at online trading and investing platform IG.

Stocks in retreat

It is a much gloomier day for global markets, though it is only 24 hours since the S&P 500 hit a new record high. But the catalogue of worries about oil prices and government borrowing costs continues to hobble the equity market. Gold and silver briefly slipped to two-month lows, while the risk-off day was completed by a rout for bitcoin. Investors are back to buying the dollar and oil, and it is notable that indices with smaller tech weightings continue to bear the brunt of the selling even after a much poorer performance of late compared with their tech-focused peers.

Iran threatens to close strait, boosting oil

Iran appears to be ramping up the tensions in the Middle East again, warning that the southerly routes out of Hormuz that have been so vital to restoring oil flows are to be closed. Oil traders appear to doubt its ability to achieve this given the preponderance of US forces, but the mere threat will drive up freight and insurance costs still further.

Author

Chris Beauchamp

Chris Beauchamp has been with IG for four years, and in that time has become a regular commentator and analyst for the financial press and TV, with appearances on all the major financial channels as well as the BBC and Sky News.

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