ASIAN STOCK MARKETS SUFFER FRESH BEATING
Tokyo, Hong Kong and Shanghai among the worst hit as investors pile into safe haven assets
ASIAN trading floors were a sea of red once again yesterday as the global rout returned with a vengeance on intensifying fears about tighter United States interest rates.
Tokyo, Hong Kong and Shanghai were among the worst hit as investors piled into safe haven assets such as gold and the yen.
The sell-off followed another battering for Wall Street, where the Dow suffered its second-heaviest daily points fall on record — the worst coming on Monday — after key US Treasury bond yields spiked fuelling the likelihood of higher borrowing costs.
After a blistering 2017 and January, markets worldwide have gone into a spasm in the past two weeks on fears that the booming global economy and rising inflation will lead to higher interest rates.
Japan’s Nikkei fell 2.3 per cent and is now at levels not seen since mid-October, Hong Kong dropped more than three per cent to put it on course to wipe out its this year’s gains. Shanghai dived 4.1 per cent to seven-month lows.
Sydney fell 0.9 per cent, Singapore shed 1.7 per cent and Seoul was 1.8 per cent off. Wellington, Manila and Taipei were also hammered.
A key trigger of the pullback was last Friday’s strong US jobs report that also showed rising US wage growth, fuelling speculation the US Federal Reserve will lift rates more than the three times already expected this year.
At the same time, the European Central Bank is on the verge of ending its crisis-era stimulus, and the Bank of England warned on Thursday that rates may rise.
In New York on Thursday, US stocks plunged four per cent on Thursday in another dramatic session, confirming a correction that has thrown the market’s nine-year bull run off course.
The bottom of this recent slide remained elusive for investors, who have been whipsawed this week by huge swings that have shaken a market that had only climbed steadily for months.
With Thursday’s drops, the benchmark S&P 500 and the Dow industrials confirmed they were in correction territory, both falling more than 10 per cent from January 26 record highs.
The S&P 500 slumped 3.8 percent on Thursday, while the Dow dropped 4.2 per cent as losses accelerated late in the trading day.
The S&P 500 last confirmed a correction in January 2016, when it fell 13.3 per cent amid concerns about a slump in oil prices.
The Dow Jones Industrial Average fell 1,032.89 points to 23,860.46, the S&P 500 lost 100.66 points to 2,581 and the Nasdaq Composite dropped 274.83 points to 6,777.16.