Global markets take a nosedive after US stocks plummet
Record sharp declines plagued the stock markets in Asia and Europe after US stocks took a nosedive on Thursday in what is considered to be its worst day since the 2008 financial crisis.
Hong Kong’s Hang Seng and Australia’s All Ordinaries were the worst hit, dropping by more than four percent. Japan’s Nikkei fell by 3.72 percent while South Korea’s Kospi closed down at 3.70%. China’s Shanghai SE Composite Index proved to be the most resilient among the Asian stock market, suffering a decline of only 2.2 percent.
Both the UK FTSE 100 Index and the Germany Dax Index declined by 2.5 percent.
The widespread decline in the global stock markets occurred after the US Dow plummeted down by 512 points—equivalent to 4.3 percent—making this its ninth lowest drop ever, and the steepest decline since the financial crisis back in October 2008. S & P 500 plummeted by a staggering 60 points, equivalent to 4.8 percent while the Nasdaq experienced the lowest drop—136 points or an equivalent of 5.1 percent.
Financial analysts point to rising fear and concern towards the economy and the continuous weak job market as among the integral factors that contributed to the observed nosedive among global stock markets.
“It’s true that we are in a period of a high level of uncertainty,” ECB President Jean-Claude Trichet told reporters during a press conference. “[This is seen] not only in the euro are but at the global level.”
Euro Pacific Capital president Peter Schiff also pointed the overconfidence of the US stock market to be a reason for the drop in its performance, setting the stage for another possible recession.
“The conventional wisdom on Wall Street was that the [US] economy was growing,” he explained. “[They believed] that the worst was behind us. Now what people are realizing is the stimulus didn’t work, and we may be headed back to recession [because of it].”
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