You are here: Home » PTI Stories » National » News
Business Standard

Asian shares fall after Wall Street plunge

AP  |  Beijing 

China's stock market benchmark plunged 5.5 per cent today and other Asian markets were off sharply after the Dow Jones industrials on plummeted more than 1,000 points, deepening a week-long sell- off.

Asian markets followed down after the Dow entered "correction" territory for the first time in two years.

The Composite Index dipped 5.5 per cent but recovered slightly to end morning trading down 4.1 per cent at 3,127.91. Tokyo's was off 3.2 per cent at 21,180.28 and Hong Kong's Hang Seng fell 4.2 per cent to 29,142.87. Benchmarks in Australia, and also retreated.

Financial analysts regard corrections as a normal market event but say the latest plunge might have been triggered by a combination of events that rattled investors. Those include worries about a potential rise in US inflation or interest rates and whether budget disputes in might lead to another government shutdown.

"Markets are down again today, maybe unnerved by fears that the U.S. Senate will not pass a budget bill in time to avoid a shutdown," said of ING in a report.

"With financial markets vulnerable at the moment, this was not great timing for such political brinksmanship." Chinese markets fell despite unexpected strongly trade data yesterday.

In Europe, markets were unnerved yesterday by the Bank of England's indication that it could raise its key interest rate in coming months due to stronger global economic growth.

Germany's DAX lost 2.6 per cent while France's ended down 2 per cent. Britain's fell 1.5 per cent. After hitting a high two weeks ago, US stocks started to tumble last week after the Labor Department said workers' wages grew at a fast rate in January.

Investors worried rising wages will hurt corporate profits and could signal an increase in inflation that could prompt the Federal Reserve to raise interest rates at a faster pace, putting a brake on the

Since then, the Dow and the Standard & Poor's 500 have fallen 10 per cent, Wall Street's traditional definition of a correction.

On Wall Street, many companies that rose the most over the last year have borne the brunt of the selling. and have both fallen sharply.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, February 09 2018. 09:45 IST