- Stock markets around the world sell off sharply as fears about slowing economic growth and rising interest rates spook investors.
- The sell-off began on Wall Street on Wednesday with the Dow Jones witnessing its third largest one-day point drop in history.
- Bloodbath then spread to Asia with China’s most significant mainland index, the Shanghai Composite, losing more than 5%.
- Europe is now suffering, with virtually all major bourses down more than 1.2% in the first hour of trading.
Stock markets around the world are taking a hammering on Thursday as rising fears about global economic growth and ongoing trade tensions continue to rattle investor confidence.
The sell-off started in the US on Wednesday, with the Dow Jones seeing a more than 800 point drop during the session, its third biggest single-day point fall in history. Things then spread to Asia overnight, with all major indices on the continent witnessing major drops.
“Equity markets are locked in a sharp sell-off, with concern around how far yields will rise, warnings from the IMF about financial stability risks, and continued trade tension all driving uncertainty,” analysts at ANZ Bank wrote on Thursday.
Concerns in Asia are exacerbated by investor doubts that fresh stimulus from China’s central bank will help prevent US President Trump’s trade war from triggering an economic slowdown. Warnings about global growth from the IMF, along with rising interest rates, contributed to the concerns. Trump yesterday weighed in on the selloff to blame the Fed, calling its interest rate policy “crazy.”
- CHINA: Shanghai Composite was down to 2,607.44, -4.34%.
- EUROPE: By about 8.25 a.m. BST (3.25 a.m. ET) Asia’s bloodbath session had spread into Europe, with virtually all major European indices losing more than 1% of their value in early trade.
- UK: Britain’s blue-chip FTSE 100, for example, has lost 1.22% to trade at 7,058 points, while Italy’s FTSE MIB index is now just a whisker away from entering a bear market, down 1.16% at 19,489.
“A crazy day in the markets yesterday looks set to continue with further selling expected in equities today,” Neil Wilson, chief analyst at Markets.com said in an email Thursday morning. “Clearly we’ve entered a severe bout of selling that may well have further to go.”
China’s most significant mainland index, the Shanghai Composite, dropped more than 5% during Thursday’s trading session, the second time in just four days it has lost 4% or more of its value. Elsewhere in Asia, Hong Kong’s Hang Seng lost 3.3%, while Japan’s benchmark Nikkei 225 was down just shy of 4%.
While the market is clearly gripped by fear right now, US Treasury Secretary Steven Mnuchin urged calm.
“Markets are not efficient and markets move in both directions and at times they overshoot in both directions,” he told reporters on the sidelines of the IMF’s annual meeting in Bali, Indonesia.