Investors are braced for further market volatility after the Iseq endured a torrid end to last week, following a global sell-off due to fears over China and concerns over more uncertainty in Greece.
About €7.4 billion was wiped from the value of companies listed on the Irish stock exchange last Wednesday, Thursday and Friday. The Iseq Overall, which recorded slight gains earlier in the week, fell 6.3 per cent over the three days.
It will open this morning about 8 per cent off its yearly high, which it hit on August 5th. Interim results are due this week from some of its biggest companies, such as CRH on Thursday and Kingspan today.
Global markets will be watching for China’s next move as signs of a slowdown in the world’s second-largest economy stack up, raising expectations it will act to stoke growth.
A looming snap election in Greece and a closely watched conference hosted by the Federal Reserve in the US are also likely to keep investors on their toes, in particular as they look for hints on when the US will raise interest rates.
Fears that Chinese growth is weakening, dragging down the global economy, are already hammering commodities and world stock markets. Both tumbled on Friday after a survey showed Chinese manufacturing slowed the most since the global financial crisis in 2009.
"It will be all eyes on the Chinese authorities for any further policy support steps, alongside the People's Bank of China yuan fixings and trading swings," analysts at Investec Economics said in a note to clients.
By the end of the week attention may shift to the Rocky Mountains, where policymakers are due to gather on Thursday for the Federal Reserve’s conference of central bankers, finance ministers, academics and financial market participants in Jackson Hole.
Fed chair Janet Yellen is not expected to attend, raising the prospect that officials may be tight-lipped about the likelihood of the first rate increase in almost a decade. An increase would affect global markets.
In the euro zone, investors will also be looking at a German economic sentiment survey due on Tuesday, while the spotlight will also fall on Greece, where the looming election has created more uncertainty for markets. (Additional reporting: Reuters)
