NewsExpress advert FCMB banner Fidelity bank banner NewsExpress advert
Investors panic as US, Asia stocks plunge

By News Express on 06/02/2018

Share on facebook Yahoo mail icon Gmail icon Share on Google+

Views: 569


Asian markets tumbled on Tuesday as investors dumped stocks following heavy falls in the US in anticipation of higher interest rates.

Japan’s Nikkei 225 index ended the morning session down 5.3% and Hong Kong’s Hang Seng dropped 4.7%.

It comes after the Dow Jones Industrial Average suffered its worst drop in more than six years on Monday.

A strengthening global economy and healthy corporate earnings had spurred world markets to record highs.

But the sell-off began last week after a solid US jobs report fuelled expectations that the Federal Reserve will raise interest rates faster than expected.

“Economic news from the US has been stronger than anticipated,” said David Kuo, chief executive of financial services advisory Motley Fool.

“So, perversely, the market correction has been caused by positive economic news.”

Elsewhere in Asia, South Korea’s Kospi index was down 2.6% and Australia’s benchmark S&P/ASX 200 sank 3%.

US stock futures were pointing to more sharp falls when markets open on Tuesday.

What happened in the US?

On Monday the Dow Jones Industrial Average index tumbled 1,175 points, or 4.6% to close down at 24,345.75.

The decline was the largest in percentage terms for the Dow since August 2011, when markets dropped in the aftermath of “Black Monday” – the day Standard & Poor’s downgraded its credit rating of the US.

The drop on the Dow was closely followed by the wider S&P 500 stock index, down 4.1% and the technology-heavy Nasdaq, which lost 3.7%.

The White House moved to reassure investors saying it was focused on “long-term economic fundamentals, which remain exceptionally strong”.

Why is this happening?

Investors are reacting to changes in the outlook for the American and global economy, and what that might mean for the cost of borrowing.

“The share selling....reflects a higher than previously anticipated interest rate environment,” CMC Markets analyst Michael McCarthy said.

In response to that, investors moved to sell out of stocks and put money into assets like bonds which benefit from higher interest rates.

“This isn’t a collapse of the economy. This isn’t a concern that markets aren’t going to do well,” said Erin Gibbs, portfolio manager for S&P Global Market Intelligence.

“This is concern that the economy is actually doing much better than expected and so we need to re-evaluate,” she said.

Will this have long term impact?

Analysts say investors should be prepared for choppier stock markets in the months ahead.

The Dow closed Monday having shed about a third of its gains since Mr Trump took office in January 2017.

It marks a dramatic turnaround from January, when it raced past the 25,000 and 26,000 point milestones in less than a month.

Joel Prakken, chief US economist for IHS Markit, predicts share price gains will be limited over the next two years.

But he added that markets would need to deteriorate more significantly for him to start to worry about the broader economy.

“The difference between this year and last year is we’re going to see more periods of volatility like this as the market reacts to higher inflation,” he said.

“We’re just not used to it because it’s been so long since we’ve had a significant correction.”

What does it mean for investors?

Investors have been bracing for a downturn after months of seemingly unstoppable gains.

Amid the market plunge on Monday, websites for several large money management companies suffered slowdowns or crashes.

Wall Street firms also said they have been fielding calls from people worried about their investments. (BBC)

Source News Express

Posted 06/02/2018 10:51:14 AM

 

Share on facebook Yahoo mail icon Gmail icon Share on Google+


 

CLASSIFIED ADS

REVEALED: 3 natural ways to get stronger erections, last 25minutes on bed, and increase manhood size without using drugs. Also, Natural Prostrate Enlargement Remedy.. Get In HERE...

 

You may also like...
Elumelu lauds FG, CBN over efforts to revive...

BUHARI’S MANY SINS, By Intersociety

Presidency confirms location of abducted Chibok schoolgirls

2015 won’t be business as usual —Tonye Princewill...

Elumelu to African youth: Your time for leadership...

We did not urge Nigeria to legalise cannabis...

CBN links 43 million bank accounts in BVN...

Buhari, Osinbajo, ministers meet today to discuss 2017...

Arms deal: CAN clears Oritsejafor •Accuses El-Rufai, Lai...

Alex Otti to Abians: ‘It’s not all lost:...

2019: Madumere declares for Imo governorship •Gets immediate...

Breaking: Military Command and Control Centre begins operation...

 

Latest News Rethinking Nigeria’s development with Bill Gates, Okonjo-Iweala, By Adele Adeniji Still on Buhari’s verdict on Nigerian youths, By Jerome-Mario Utomi Armed bandits abduct housewives in Kaduna Cybercrime: UK sends 2 Nigerians to prison Brave worshippers capture suicide bomber inside mosque 41 items still banned under Nigeria-China currency swap deal – CBN Pope Francis unveils 14 new cardinals, no Nigerian on the list Anambra to revive over 200 skill acquisition and entrepreneurial centres New HIV infections among pregnant women raise concerns Why Okorocha wants Nwosu to be Imo Governor in 2019, By Collins Ughalaa Certificate Scandal: HEDA asks SFU to investigate Senator Omisore dumps PDP for SDP ahead of 2019

 

Most Read Nigerian female sex addict opens up, says ‘I like it with both men and women’ (344,945 views) NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (341,565 views) Shameless Genevieve Nnaji exposes breasts in public (273,082 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (224,504 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (204,981 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (202,477 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (176,695 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (159,002 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (150,035 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (143,168 views) Lagos plane crash: Journalist releases victims’ names (139,833 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (132,242 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (40) Business & Economy (3,136) Business Verdict (43) Columnists (853) Complaints & Requests (94) Enterprise & Opportunities (207) Entertainment (497) Features (594) Global Business Monitor (273) International (1,964) Interview (149) Live Commentary (28) Love Matters (119) News (35,442) Opinion (953) Pidgin (10) Politics (5,021) Religion (742) Sports (1,512) Stock Watch (28) AMA & Al Jazeera Global Update

 

CBN banner

Firstmobile banner

 

 

NEWS EXPRESS TV

Boko Haram commanders surrender

 

APO Group Partner

 

 

CLASSIFIED ADS

REVEALED: 3 natural ways to get stronger erections, last 25minutes on bed, and increase manhood size without using drugs. Also, Natural Prostrate Enlargement Remedy.. Get In HERE...

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement