The Dow Jones suffered its biggest single-day points decline on record as investors grew jittery about interest rates Spencer Platt Getty Images
09 February, 2018, 03:18
Up to $4 trillion has been wiped off global shares as Asian and European markets plunged dramatically this morning in the wake of Wall Street's record breaking losses. The effect hit global levels as the FTSE 100 was pulled down by Dow by close of Monday. By midday it had recovered to 7,154.26 points.
The stock markets and investors in late 2017 and January 2018 had every reason to be optimistic with trading. Like other commodities, oil is priced in dollars making it more expensive when the USA currency appreciates.
On Monday, the U.S. benchmark S&P 500 fell by more than 4 per cent and the Dow Jones Industrial Average lost 4.6 per cent. They were last at 2.77 per cent. Both indices had closed down by nearly 2.5% yesterday.
"The correction is probably a healthy development and is not reflective of a souring of the macroeconomic outlook".
As a result, he thinks that it's entirely possible that this has led to some 'complacency, ' with investors perhaps 'getting a little ahead of themselves'.
According to James Hughes, chief market analyst at AXI Trader, the Dow Jones "was trying to do its best Bitcoin impression".
The upward moves came after intense volatility on USA exchanges which saw massive swings from loss to strong gains for the S&P 500, the American benchmark.
Global stocks have enjoyed months of surges fuelled by optimism over the U.S. economy, corporate earnings and the global outlook.
Stocks in world markets remained on shaky ground on Thursday, with major USA stock indexes sinking about 2 percent, as US bond yields earlier crept back toward four-year highs.
Key European markets clawed back around a third of the previous day's sharp losses.
The UK's benchmark stock index tumbled 3.5 per cent shortly after the market open, mirroring similar losses across France, Germany and other European markets.
Update: The FTSE 100 has suffered a steep fall but has clawed back some losses from a plunge at the open, after a volatile open to United States markets saw signs the heavy sell-off is abating.
The Vix "fear index", a measure of volatility on the S&P 500, last night hit its highest point since 2015 as markets whipsawed.
Traders and experts are anxious that interest rates around the globe would rise by more than previously thought. The FTSE 100 index dropped 108.45 points, or 1.5 per cent, to 7334.98.
The dollar index was flat, with the euro down 0.03 percent to $1.2258.
LONDON'S top-flight index has joined global markets by crashing into the red over fears that rising inflation could force central banks to hike interest rates.
The White House yesterday admitted it was anxious. The index tracks overall market volatility.
Throughout his presidency, Donald Trump has trumpeted the strength of the stock market, and despite the recent falls the Dow is still up almost 40 per cent since the election.
"People are still shaken after such a ferocious correction, especially as it came after a very long time".
Investors say they had been bracing for corrections of up to 10% after a bullish couple of years.
'We have got 5 per cent already.
That raised the alarm about higher inflation and, with it, potentially higher interest rates.
It had previously been thought that the Fed would raise rates only three times as it seeks to keep a lid on inflation.
An upbeat jobs report in the U.S. on Friday fuelled speculation that interest rates could rise four times this year.