- FTSE 100 hangs onto gains, helped by a rebound on Wall Street.
- Hopes for trade negotiations send relief through markets.
- Bargain hunters dive in to pick up battered stocks.
- Gold regains lustre as a safe-haven asset after recent falls.
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
‘’With hints of negotiations in the air, relief has flooded through financial markets, with the FTSE 100 rebounding from a chunk of yesterday’s losses. Investors have taken the chance to buy into beaten up stocks, with an eye on a longer-term recovery. They’ve also been buoyed by measured stances from leaders across European Union, the UK, Japan and South Korea, who have shown a willingness to talk first and hold off from retaliatory action for now. But sentiment is still skittish towards the end of the trading day, given how clouded the trade outlook is for the global economy. The China US stand-off is likely to keep markets volatile, with investors waiting with bated breath to see if Xi Jinping or Trump will blink first. The risk is that neither will be willing to lose face, and the situation could escalate further. Given this threat, geo-political tensions are high and gold appears to be regaining its lustre as a safe haven asset, rising higher after recent losses and hovering around $3,000 an ounce.
At a time of volatile market movements, it’s always important to keep an eye on long term goals and keep portfolios well-diversified across various geographies and asset classes to effectively manage risk. History has shown time and again that markets reward those who keep a cool head and think with a long-term horizon. Drip feeding investments and buying when markets fall can help ride out the volatility. It means investors may be able to take advantage of lower prices and benefit during a recovery. This can help smooth out sharp market movements over the longer-term. Most investors will be best placed to sit tight and ride out the rollercoaster.’’
