Monday, 24 September, 2018

Asian shares mixed in skittish trading after Wall St decline

Trader Michael Milano right works on the floor of the New York Stock Exchange Thursday Feb. 8 2018. U.S. stocks are lower Thursday morning as losses from the previous day continue Asian shares mixed in skittish trading after Wall St decline
Nellie Chapman | 09 February, 2018, 03:34

But by lunchtime heavy trading returned with the markets experiencing sharp swings. Energy companies dropped along with oil prices and technology companies also declined.

Australian shares are tipped to open slightly higher today, but with a little volatility.

In initial trade yesterday, European stock markets collapsed by about 3.5 percent, mirroring dramatic falls across Asia.

The Dow Jones industrial average plunged 1,033 points Thursday, its second-worst drop in history, extending its losses in the recent selloff to more than 10% and putting it officially into correction territory.

The S&P 500 posted 1 new 52-week highs and 38 new lows; the Nasdaq Composite recorded 17 new highs and 164 new lows.

Traders are still braced for more volatility as they try to figure out if the swings of the past few days are the start of a deeper correction or just a temporary blip in the USA market's nine-year bull run.

Investors are prepared for more volatility as they try to decipher if this is just temporary or a deeper correction will take place. It spiked above 50 early on Tuesday.

"While volatility in the markets has eased over the last couple of days, it has remained at very high levels - probably a sign of the ongoing nervousness among investors which may leave markets vulnerable to further declines", Craig Erlam, senior market analyst at Oanda, said in a note.

After huge gains in the first weeks of this year, stocks tumbled Friday after the Labor Department said workers' wages grew at a fast rate in January.

"Seemingly the only hope for the markets at the moment is that investors suddenly decide that the sell-off has been a bit overdone", said Connor Campbell, a financial analyst at Spreadex. "It takes away what many considered to be easy money". It rose by as much as 381 points at its peak, but also fell by as much as 127 points at its lowest ebb.

The Dow Jones industrial average jumped as much as 510 points. That is big, but it is dwarfed by the lurching moves the market made the last few days. Most investors have also been anxious for some time about the impact that tighter monetary policy would have on stock prices.

"The market has become a much more risky place", billionaire Carl Icahn told CNBC. Germany's DAX Index dropped 2.3 percent, France's CAC40 Index shed 2.4 percent, while the UK's FTSE 100 index fell 2.6 percent.

Japan's benchmark Nikkei 225 index surged as soon as trading began, but gave up its initial gains as the yen strengthened against the dollar. Hong Kong's Hang Seng skidded 5.1 percent and South Korea's Kospi declined 1.5 percent. All 30 of the blue-chip Dow industrial components finished negative. In spite of the recent turmoil though, the Dow is still up 40 percent since Trump's election.

Wynn Resorts climbed 8.6 per cent after casino mogul Steve Wynn resigned as the chief executive following sexual misconduct allegations.

Andrew Zimbalist, an economist at Smith College in MA, said the volatility in the United States - and the impact on Asia - was "not surprising in the least" given what's been happening.