Markets still roiled by rate rise fears as early gains wiped out

CONVULSIONS rocking US equity markets continued yesterday, with major indexes headed for the worst week in almost seven years after falling back from early gains. Treasury declines eased as investors sought havens from gold to the yen.

Investors hoping for signs of stability after Thursday’s late-day swoon got whipsawed in the first 90 minutes of trading.

After rebounding as much as 1.5pc, the S&P 500 wiped out the gain in a matter of minutes and is down 6pc in the week. The Cboe Volatility Index held near 30, twice its level from a week ago, while other measures of market angst showed jitters emerging in assets from junk debt to treasuries.

Europe and Asia weren’t spared for the selling that’s wiped more than $5trn (€4.09trn) from the value of global stocks in just five days.

In Dublin the ISEQ was down -0.72pc. Baked goods maker Aryzta saw one of the sharpest declines, down 7.76pc, but the sell-off in the past week has been across sectors and companies.

The Stoxx Europe 600 Index headed for its worst week since 2016 and has erased almost half a year’s gains. China’s benchmark fell the most in almost two years earlier.

The global MSCI World Index is set for its biggest weekly drop since 2011.

At the core of the crash are equity traders who have yet to get comfortable with the jump in benchmark US 10-year bond yields, which signal a wider shift higher in debt costs, and worries over unwinding bets against volatility in stocks continue to cast a shadow over markets.