Stock markets on cusp of ‘another crash’ warn financial analysts

Financial analysts have warned of another ‘crash’ in global markets after the FTSE 100 fell 120 points in just two hours of trading on Tuesday, its biggest slump since Chinese stock markets plummeted on ‘Black Monday’ last month.

IG Market Analyst Joshua Mahony asked whether the world was on the cusp of “a major selloff” as the US Federal Reserve and Bank of England (BoE) consider raising interest rates.

Mahony said artificially-low interest rates held by the Fed and BoE had acted like “steroids” and brought the markets to “heights previously unseen.”

The stark warning comes as commodity prices on the FTSE 100 slumped in recent days, with mining, oil and copper prices falling sharply.

With the FTSE 100 tumbling over 120 points in two hours [Tuesday] morning, it is becoming clear that there is a distinct possibility of yet another crash in financial markets,” Mahony said.

Anglo American plc and Antofagasta — both mining companies — saw losses of more than 6 percent.

This slump in commodity prices combined with plummeting Volkswagen shares as the emissions scandal continues to unravel prompted a bleak outlook from Mahony.

With the [Federal Open Market Committee] meeting and Greek elections both resolving in a positive manner for financial markets and global stability, it would make sense that we saw some form of relief rally in response,” he said.

However, the weakness seen since Thursday’s Federal Reserve decision [to hold interest rates] is highlighting a high possibility that we are due to embark on yet another major selloff in global indices.

This piece was reprinted by RINF Alternative News with permission or license.

Via RT.