FTSE down as oil falls to 18-year low
The FTSE 100 has fallen 1.61 per cent in early trading, as the new week starts with another drop in the oil price.
UK blue-chips joined other European markets with declines at Monday’s open, following a weak session in Asia overnight.
US crude oil prices dropped below $20 a barrel on Sunday, which is close to their lowest level in 18 years, after investors started to worry about the impact of the looming coronavirus recession on demand.
Fiona Cincotta, market analyst at Gain Capital, said: “The markets are showing mixed signs at the start of the new week. On the one hand European and US futures are pointing to a jump on the open as traders that weren’t prepared to hold risk over the weekend are prepared to enter the markets at the start of the week. However, the safe haven dollar is also back in play recouping some of its steep losses from the previous week.
“The mixed messages in the market come after herculean moves by central banks and governing authorities are underpinning risk sentiment, at the same time that governments are considering extending lock down periods to protect the public from coronavirus. The numbers continue to escalate in Europe, the UK and the US, although the number of daily deaths in Italy has fallen for a second straight day, boosting optimism that the outbreak has peaked there.”
RWC poaches Nick Clay and BNY Mellon global equity team
Fund boutique RWC Partners has hired highly respected income manager Nick Clay and other members of his global equity team from BNY Mellon subsidiary Newton.
Clay and Andrew MacKirdy, along with two other members of the team, will lead a new global equity income team at RWC. This will sit alongside its existing UK equity income strategy, which is managed by Nick Purves and Ian Lance.
Clay and MacKirdy were co-managers on the £5.2bn BNY Mellon Global Income fund and several related strategies. Their departure from BNY Mellon was announced last week.
Commenting on the move, FundCalibre managing director Darius McDermott said: “This is a great hire for RWC. Nick and the team are very experienced, and the boutique doesn’t yet have a global equity income franchise, so it’s a gap the company can fill very nicely.
“RWC has hired teams before with great success: when they enticed Ian Lance, Nick Purves and John Teahan from Schroders in 2013, and Graham Clapp and his team from his own company Pensato (and previously Fidelity) in 2017, for example.
“I see no reason why this success cannot be replicated by Nick and the team in the future. It’s an exciting new start for them and I look forward to seeing details of a new fund launch in the not-too-distant future.”
Massive stimulus giving markets just enough breathing room but for how long?
After a weak trading session in Asia and further falls in the oil price, AxiCorp chief global markets strategist Stephen Innes said: “Massive monetary and fiscal spending is giving investors just enough breathing room to figure out the extent of the economic damage done. However, that oxygen supply is rapidly depleting with increased US and global Covid-19 case counts. To that end, Asia markets are trading on the back foot today as risk appetite wanes, pointing to more turmoil ahead.
“However, it was the fall in oil prices that triggered a more broad-based cross-asset sell-off after the WTI front-month contract fell below the key $20/bbl at the Asia open. Fortunately for risk sentiment, the breach of that psychological level didn't lead to an even deeper dive in prices.
“Prices are tentatively stabilising, and risk is turning back on again as market makers are back replenished their shopping list of go-to equities. But the week is still young as the oil market faces an unprecedented demand-supply shock that is challenging oil storage facilities. At the same time, Saudi Arabia and Russia show no signs of returning to negotiations to cut output.
“It's so difficult to gauge these markets as it's taking minimal volume to move the market these days.”