Gold, bitcoin, the euro and US stocks are collapsing due to fears of World War II – but the FTSE 100 is holding fast | Personal Finance finances

Even Russia’s threats to start World War III with a nuclear strike on Britain did not shake the London index of major blue chip stocks. Our stock market has also given up on the cost of living crisis and fears that tough quarantine measures in China will slow down the global economy.

Shares in the United States and Europe are falling rapidly and are vulnerable to further decline, but the UK is an exception, said Chris Bosham, chief analyst at IG’s online commerce market.

“As the markets of continental Europe and the United States are ready to return to the last lows in March, rising commodity prices are helping the FTSE 100 outperform.”

The FTSE 100 is full of inventories that produce valuable goods, including copper and iron ore, such as Anglo American and Rio Tinto.

Commodity prices are rising sharply due to the shortage caused by supply chain problems after the pandemic.

Bosham said it caused a turnaround in the wealth for Britain’s highest index, adding: “This is probably the most amazing development of the stock market this year.”

The Euro Stoxx 50 index has fallen 13.79% since the beginning of the year, while the US S&P 500 has fallen 12.77%.

The NASDAQ index of major US technology stocks fell 18.02% due to problems with giants such as Facebook (now renamed Meta) and Netflix.

All these major markets have undergone a technical “correction”, which is defined as a fall of more than 10%.

Yet the FTSE 100 has fallen just 1.06% this year, despite growing fears of global war and recession.

Europe’s single currency has also fallen, Boshan said. It is close to parity with the US dollar and may soon be traded for only $ 1.05.

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Boshan said that the reluctance of the European Central Bank to raise interest rates to curb inflation is one of the reasons for the low efficiency of the euro. “Another is that banning Russian gas imports could lead to a recession.”

A ban on Russian oil and gas would be right, he said, but added: “The impact on consumers is likely to mean that a reduction in economic growth is almost inevitable.”

In other words, the eurozone could enter a recession.

Investors have reason to be gloomy, said Fawad Razakzada, a market analyst at City Index and Forex.com.

“There is an energy crisis in Europe, and Russia’s decision to cut off gas supplies to Poland and Bulgaria could provoke an energy war.”

According to him, China’s determination to overcome the Covid outbreak through austerity measures is also slowing the global economy.

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The biggest risk is that the US Federal Reserve pursues an aggressive policy of tightening monetary policy and raising interest rates, which slows growth.

“It is difficult for investors to buy and hold stocks in the long run. Nasdaq is going to destroy all its achievements from last year, “Razakzada said.

Even supposedly safe gold is now declining, said Matt Weller, global head of research at StoneX.

It reached a two-month low of $ 1,876, despite “the highest inflation rate in decades in the world and a military conflict with the world’s nuclear power,” he said.

The precious metal is superior to another safe haven, the US dollar, which investors expect to strengthen when the Federal Reserve raises interest rates, Weller added.

Bitcoin has fallen 10.88% since the beginning of the year and 20.08% since the beginning of the year. Simon Peters, eToro’s cryptocurrency market analyst, said: “Terrible inflation, rising interest rates and high geopolitical uncertainty have created an unstable picture.”

However, he said more and more British crypto investors believe it remains an attractive repository of value and a hedge against inflation.