Global equities were obliterated on Monday as oil prices sank and fears of a coronavirus induced recession led to one of the worst days for equities in history.
The FTSE 100 opened down over 7% and the selling continued sending London’s leading index to one the worst day since the financial crisis.
Front month WTI Oil was down 30% in the Asia session overnight after Russian President Putin took aim at the US shale gas industry and Saudi Arabia.
Putin raised fears of an oil price war as he rejected OPEC proposals to cut oil production.
While this takes on the Saudis in a scrap for market shares, the US oil industry will likely be the ones that suffer.
Many shale gas operations simply cannot produce oil profitably at such low levels.
This, however, was not of great concern to Donald Trump who pointed to the lower petrol prices consumers would enjoy.
Good for the consumer, gasoline prices coming down!
— Donald J. Trump (@realDonaldTrump) March 9, 2020
In addition to the fall out of Putin’s moves, the rise of coronavirus increased chances of a coronavirus
Despite sharp declines being followed by some interest in buying, some analysts were sceptical of the bounce being sustained.
There is an awful lot of bargains out there now. But suspect most of them will become even better bargains in coming weeks.
— Chris Beauchamp (@ChrisB_IG) March 9, 2020
