Voice of America
11 Oct 2018, 14:35 GMT+10
SINGAPORE - A stock market rout that started on Wall Street rolled through Asia, driving China's benchmark to a four-year low Thursday and knocking down indexes in Japan, Korea and Australia.
The Shanghai Composite index plunged 5.2 percent to its lowest level since November 2014, and Japan's Nikkei 225 fell by an unusually wide margin of almost 4 percent. Markets across Southeast Asia recorded similar declines.
"Equity markets were pulverized today," with investors in "full out retreat," Stephen Innes of OANDA said in a commentary. The "latest sneeze" from Wall Street "could morph into a global markets pandemic," he added.
A television screen on the trading floor of the New York Stock Exchange shows the plunging numbers for the Dow Jones industrial average, March 22, 2018, as investors feared trade tensions will spike between the U.S. and China.
Interests rates worry investors
Investors are wary of possible further U.S. interest rate hikes, which will raise the cost of corporate borrowing and weigh on economic growth.
On Wednesday, President Donald Trump said the Federal Reserve "is making a mistake" with its campaign of rate increases. "I think the Fed has gone crazy," he charged.
"Equity investors are surprised by the pace at which rates have risen," said Marcella Chow, global market strategist at J.P. Morgan Asset Management in a report.
Tariff fight, too
Sentiment also has been dampened by the spreading U.S.-Chinese tariff fight over Beijing's technology policy. The International Monetary Fund cut its outlook for global growth this week, citing interest rates and trade tensions.
The U.S. Treasury is to release a currency report that some analysts suggest might change the official stance on China's exchange rate policy. Chow said it was unclear whether the Treasury might label Beijing a "currency manipulator," a status that could trigger penalties, or whether it could be "another pre-text for the next round of tariffs."
Adding to potential U.S.-China tensions, the Justice Department announced Wednesday it arrested an official of China's Ministry of State Security on charges of trying to steal trade secrets from U.S. aerospace companies.
The numbers
Tokyo's Nikkei 225 gave up 3.9 percent to 22,590.86 and the Shanghai Composite index lost 5.2 percent to 2,583.46. Hong Kong's Hang Seng index shed 3.7 percent to 25,220.67. The Kospi in South Korea fell 4.4 percent to 2,129.67. Australia's S&P/ASX 200 slipped 2.7 percent to 5,883.80. Stocks plunged in Taiwan and fell across Southeast Asia.
On Wednesday, U.S. stocks slumped as concerns over rising interest rates and trade tensions caused a sell-off in technology and internet stocks. The Dow Jones Industrial Average suffered its worst loss in eight months, falling 3.1 percent to 25,598.74.
The S&P 500 index sank 3.3 percent to 2,785.68. The Nasdaq composite, which has a large contingent of technology stocks, was 4.1 percent lower at 7,422.05. It has fallen 7.5 percent in just five days. The Russell 2000 index of smaller-company stocks shed 2.9 percent, to 1,575.41.
Apple and Amazon, the two most valuable companies in the S&P 500, each had their worst day in 2½ years. Apple slipped by 4.6 percent while Amazon lost 6.2 percent.
Amazon has soared 50 percent this year, but its stock has fallen 14 percent from its all-time high in early September.
Get a daily dose of Shanghai Sun news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Shanghai Sun.
More InformationZURICH, Switzerland: The Swiss National Bank (SNB) lowered its key interest rate to zero percent on June 19 to respond to falling inflation,...
WASHINGTON, D.C.: The U.S. government is preparing to revise its influential dietary advice, with a significant shift: dropping the...
ZURICH, Switzerland: The U.S. saw an extraordinary rise in wealth last year, with more than 1,000 people crossing into millionaire...
THE HAGUE, Netherlands: The city that prides itself on being a beacon of peace and justice—home to institutions like the International...
BUENOS AIRES, Argentina: Since taking office in December 2023, Argentine President Javier Milei has implemented sweeping austerity...
LEMBATA, Indonesia: Indonesia's Mount Lewotobi Laki Laki erupted dramatically on June 18, generating substantial ash and smoke plumes....
BEIJING/WELLINGTON: New Zealand's Prime Minister Christopher Luxon commenced his visit to China on June 17, seeking to strengthen trade...
TOKYO, Japan: Japan has a new top sumo wrestler — and he's Japanese. Onosato, who weighs 191 kilograms (421 pounds), has become a yokozuna,...
Seoul [South Korea], June 21 (ANI): South Korea's leading industrial players are ramping up their efforts in the electric vehicle (EV)...
Chandigarh [India], June 21 (ANI): Union Education Minister Dharmendra Pradhan on Saturday emphasised the importance of yoga on the...
Lahore [Pakistan], June 20 (ANI): The Pakistan Tehreek-e-Insaf (PTI) has criticised the Punjab government for spending more than Pakistani...
Bhopal (Madhya Pradesh) [India], June 19 (ANI): Madhya Pradesh Chief Minister Mohan Yadav is scheduled to inaugurate the Sadanira Samagam...