Asian markets have plunged dramatically this morning after Wall Street suffered record breaking losses amid fears of a rise in interest rates in the US.
Tokyo led the markets bloodbath throughout the region, with the Nikkei 225 briefly diving almost seven per cent before closing down 4.7 per cent.
Hong Kong lost more than five per cent in its worst day since summer 2015, while Sydney and Singapore each sank three per cent.
This morning, London’s FTSE 100 fell to its lowest level since late 2016, dropping as low as 7079.4 at one stage soon after opening.
Asian markets have plunged this morning after Wall Street suffered record breaking losses sparked by fears of a rise in interest rates in the US
This morning, London’s FTSE 100 fell to its lowest level since late 2016, dropping as low as 7079.4 at one stage soon after opening
Tokyo led a collapse throughout the region, with the Nikkei 225 briefly diving almost seven percent before closing down 4.7 percent
The US slump – the Dow’s biggest percentage fall in six years – followed a 665-point collapse on Friday – the sixth biggest fall of all time. The Dow Jones has now suffered losses in four of its last six trading days
Traders and experts are worried that interest rates around the globe would rise by more than previously thought. Pictured: A Wall Street trader working on the floor of the New York Stock Exchange reacts as markets tumble
Other assets were also hammered, with a slump in oil prices scything energy firms, while higher-yielding currencies have been hit by a flight to safe havens.
Dealers tracked their colleagues in New York, where the Dow Jones suffered its worst points fall in history on Monday and wiped out all its 2018 gains, while the S&P 500 also took a beating to sit down for the year.
Global stocks have enjoyed months of surges fuelled by optimism over the US economy, corporate earnings and the global outlook.
But turmoil yesterday was echoed across Europe, with the stock market down 0.8 per cent in Germany, 1.5 per cent in France, 1.6 per cent in Italy and 1.4 per cent in Spain.
Fears are growing that stock markets are on the brink of a prolonged sell-off, with the FTSE 100 suffering its fifth straight day of losses yesterday. Futures markets show the London blue-chip index opening around 1.46 per cent lower – a drop of 108.4.
The US slump – the Dow’s biggest percentage fall in six years – followed a 665-point collapse on Friday – the sixth biggest fall of all time. The Dow Jones has now suffered losses in four of its last six trading days.
Traders and experts are worried that interest rates around the globe would rise by more than previously thought.
Nearly £28billion was wiped off the value of share prices in the City, on a punishing day for savers and pensioners with money tied up in the stock market. The FTSE 100 index dropped 108.45 points, or 1.5 per cent, to 7334.98.
The blue-chip index has now lost 5.9 per cent of its value since hitting an all-time high of 7792.56 on January 12 – costing investors £117.6billion.
Dealers tracked their colleagues in New York, where the Dow Jones suffered its worst points fall in history on Monday and wiped out all its 2018 gains, while the S&P 500 also took a beating to sit down for the year
The slump fuelled fears that global stock markets have peaked and are now set for a correction as central banks around the world, led by the Federal Reserve in the US, raise interest rates to tame inflation.
The White House yesterday admitted it was worried. ‘We’re always concerned when the market loses any value, but we’re also confident in the economy’s fundamentals,’ an official said.
Throughout his presidency, Donald Trump has trumpeted the strength of the stock market, and despite the recent falls the Dow is still up nearly 40 per cent since the election.
But Tony James, president and chief operating officer of fund manager Blackstone, warned that further stock market falls were ahead.
Traders and experts are worried that interest rates around the globe would rise by more than previously thought
‘People have been saying for a long time that stocks are overvalued,’ he said. ‘I think we could easily see a 10 per cent to 20 per cent correction sometime this year.
‘We have got 5 per cent already. Every historic norm says stocks are very, very fully valued.’
He warned that President Trump’s tax cuts could turbo-charge the US economy to such an extent that the Fed is forced to raise rates by more than currently expected.
Fears over rising inflation and higher interest rates have rattled investors in recent days – particularly in the US.
An upbeat jobs report in the US on Friday fuelled speculation that interest rates could rise four times this year.
It had previously been thought that the Fed would raise rates only three times as it seeks to keep a lid on inflation.