Top Japanese officials on Tuesday sought to downplay concerns about plunging share prices, pointing to strong growth and corporate earnings as reasons for calm. The investors were betting on the U.S. economy due to strong expansion improving corporate earnings and stable inflation, but the trend seems to be changed.
The Nikkei was trading down 5.3 per cent at 21,490.63 in midmorning trade, the lowest level since October 20.
The Dow carved out a 1,100-point trading range in all, signifying a return of volatility to a market that until recently was marked by an absence of major shifts. It last stood at $66.97 per barrel, down 1.0 percent on the day.
The dollar was changing hands at ¥109.20 in Asia on Wednesday against ¥109.57 in NY.
The Dow Jones industrial average plunged 1,175 points, or 4.6 percent, erasing its gains for the year. Germany’s DAX was down 2 percent at 12,433.
The prosepct of a higher-than-expected rise in USA interest rates this year has spooked investors on the ground.
Gold was down nearly two percent from Tuesday’s highs before bouncing slightly to sit one percent lower. The Nasdaq fell 273, or 3.8 percent, to 6,967. It’s hard to tell how far markets may decline, but given that economic fundamentals remain strong, I think investors will start buying the dips sooner than later.
The blue-chip Dow Jones Industrial Average closed up 2.3% at 24,912.77.
The Russell 2000 is down 39.30 points, or 2.5 percent. That came during a 15-minute stretch where the 30-stock index lost 700 points and then gained them back.
Selling on global stock markets has ramped up because of expectations the U.S. Federal Reserve could increase interest rates more quickly than previously thought. It was down 872, or 3.4 percent, to 24,651.
The SP 500 ended 7.8 per cent down from its record high on January 26.
Japan’s benchmarks advanced, though pulled back from the session’s highs, as SP 500 Index futures declined and Chinese shares dropped, suggesting the recovery isn’t yet on solid ground.
The euro eased to $1.2358, not far from last week’s low of $1.2335, a break of which could usher in a further correction after its rally to a 3-year high of $1.2538 by late last month. The slide comes after many banks in the US and United Kingdom considered banning customers from buying cryptocurrencies using their credit cards.
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.
Eisai Co rose 5.4 percent, Astellas Pharma 4.5 percent, Inpex Corp 4.0 percent and Honda Motor 3.3 percent.
It was not too hard to see that the big bad wolf was coming. That raised the alarm about higher inflation and, with it, potentially higher interest rates.
The Standard Poor’s 500 index was down 8 points, or 0.3 percent, at 2,639.
The DOW Jones fell almost 1,200 points today at the closing bell.
Other banks also fell. Rate-sensitive utilities, down 1.5 percent, led decliners.
Meanwhile, the Shanghai Composite, which tends not to follow the global trend due to the limited flow of funds, opened 1.2% higher but closed the morning session down 0.8% at 3,343.44.