FTSE 100 sinks below 6,800

It's that time of year again. Things always get a little hairy after the summer break when everyone's back at their desks. Concerns about markets, put to one side during holiday season, resurface and big events pencilled into diaries loom large. Last year, the Chinese crash came early; the year before it was US growth and Ebola; in 2013, it was Federal Reserve stimulus tapering. In 2016? Take your pick.

Clearly, conditions are very different this year, and central bank stimulus has put a floor under any pullback in equity markets. But this can't continue indefinitely, and its effectiveness is being questioned more widely.

Global growth has slowed, too, and, as Deutsche Bank analysts point out Tuesday, central banks are increasingly reluctant to lower bond yields further because of the impact on financial sector profits. That's heightened concerns about limited upside from stimulus and slower growth hurting equities. We'll get a better idea of corporate earnings progress when third-quarter results season kicks off next month.

Deutsche remains 'overweight' bond proxies - sustainable dividend payers and real estate - who should benefit if bond yields remain low. So should consumer staples, although financials will continue to struggle.

That's something Deutsche Bank knows only too well. Its shares plunged to new lows Monday amid heightened concerns for its future and as we heard again that Angela Merkel will not bail out the lender. And the shares remain glued to those lows as negotiators prepare to haggle over a $14 billion fine in the US.

UK banks have endured a second day of losses. Worst hit is Royal Bank of Scotland, which will next year likely receive its own fine for underwriting residential mortgage-backed securities. The shares are down 3% at their lowest in over two months.

It's partly why an early fightback unravelled. A near-50-point rally within minutes of the open soon went up in smoke and the FTSE 100 has traded back below 6,800 for the first time in a week.

Last night's first in a best-of-three TV debate between the US presidential hopefuls went to Clinton, although it'd be unwise to dismiss Trump just yet. Over here, ongoing fear of a Brexit "hard landing" is giving investors food for thought. Sitting on fat profits after a spectacular summer rally, many are booking profits Tuesday.

Plumbing supplies giant Wolseley has had a stinker. Although annual profits swelled, driven by its core American division, the UK business struggled amid a slowdown in highly profitable repair, maintenance and improvement markets. Wolseley hopes spending £100 million shutting 80 branches and cutting 800 jobs will mend things.

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