FTSE 100 turns negative as concerns linger

The FTSE 100 attempted to bounce back on Tuesday following a significant drop in global stock markets on Monday.

The main stock market in London showed signs of improvement at the start of trading on Tuesday, but it didn't fully make up for the losses seen in the past few weeks. The initial boost was short-lived as trading continued, but the decline was not as significant as what had been experienced recently.

Rarely does selling like what we saw result in the bottom of a stock market decline.

However, investors were happy to see a big increase in Japanese stocks last night. The Nikkei rose by 10% during the Asian trading session, following a massive 12% drop in the previous session.

One of the key causes of the recent market fluctuations is the Yen carry trade being reversed. This happened after the Bank of Japan unexpectedly raised interest rates last week. Investors were accustomed to borrowing Yen to fund investments in other areas, and the unraveling of this trade has had a significant impact on global markets.

Positive performance in Japanese stocks overnight helped ease worries about the Yen carry trade, but there are still concerns lingering. Worries about the US economy and high-priced tech stocks are still present, showing that the markets are not completely stable.

According to Matt Britzman, a senior analyst at Hargreaves Lansdown, investors should not think that the current stability in the markets means that they are back to making sense. The volatility index (vix) is still high, indicating that there may be more ups and downs ahead.

For investors who plan to hold onto their investments for a long time, there is some positive news. The current situation doesn't seem to be caused by one specific issue, but rather a combination of factors. It is likely that things will settle down, and trends like the AI revolution will continue to grow in the long run.

Investors will also be happy to see Palantir, a US technology company closely linked to artificial intelligence, exceed earnings predictions and rise by about 7% before the market opens.

In the UK, Rightmove experienced the biggest drop in the FTSE 100 index after announcing that a major contract would be ending on September 1st. This termination would lead to a loss of approximately 3% of the group's rental members. Currently, Rightmove's shares have fallen by 4%.

Shares of Rolls Royce rose by 2.8% following JP Morgan's decision to raise its price target for the company to 456p.