scorecardresearch
Follow Us:
Sunday, November 29, 2020

US stock markets plunge in early trade; Dow Jones falls more than 1,000 points

Growing concerns about a slowdown in China had already shaken markets around the world on Friday, driving the US stock market sharply lower. A big sell-off in Chinese stock on Monday caused the rout to continue.

By: AP | New York | Updated: August 25, 2015 6:58:34 am
US stock market, New York Stock Exchange, Dow Jones, China market, Japan stock exchange, BOmbay stock exchange, Traders work on the floor of the New York Stock Exchange August 24, 2015. Wall Street opened sharply lower on Monday with the Dow Jones industrial average losing more than a 1,000 points following a more-than 8 percent drop in Chinese shares and a selloff in oil and other commodities. (Source: Reuters)

US stock markets plunged in early trading Monday following a big drop in Chinese stocks.

The Dow Jones industrial average fell more than 1,000 points in early trading and the Standard & Poor’s 500 index fell into correction territory, that’s Wall Street jargon for a drop of 10 per cent or more from a recent peak.

Treasuries surged as investors bought less risky assets.

Growing concerns about a slowdown in China had already shaken markets around the world on Friday, driving the US stock market sharply lower. A big sell-off in Chinese stock on Monday caused the rout to continue.

The Dow was 668 points, or 4.1 per cent, lower as of 9:57 a.m. Eastern time. The Standard & Poor’s 500 index dropped 81 points, or 4.2 per cent, to 1,889. The Nasdaq composite fell 211 points, or 4.4 per cent, to 4,496 points.

[related-post]

China’s main index sank 8.5 per cent amid fears over the health of the world’s second-largest economy.

Oil prices, commodities and the currencies of many developing countries also tumbled on concerns that a sharp slowdown in China might hurt economic growth around the globe.

The Shanghai index suffered its biggest percentage decline since February 2007, with many China-listed companies hitting their 10 per cent downside limits. The benchmark has lost all of its gains for 2015, though it is still more than 40 per cent above its level a year ago.

Underlying the gloom in China is the growing conviction that policymakers and regulators may lack the means to staunch the losses in that nation. The country is facing a slowdown in economic growth, the banking system is short of cash and investors are pulling money out of the country, experts note.

“There is a lot of fear in the markets,” said Bernard Aw, market strategist at IG.

China’s dimming outlook is drawing calls for more economic stimulus from Beijing, though earlier government efforts to stop the sell-off in stocks appear to have done little to stabilize markets.

The bloodletting spread across Asia earlier, where Japan’s Nikkei fell 4.6 per cent, its worst one-day drop since in over two and a half years. Hong Kong’s Hang Seng index fell 5.2 per cent, Australia’s S&P ASX/200 slid 4.1 per cent and South Korea’s Kospi lost 2.5 per cent.

Those declines followed tumbles over the weekend in emerging markets such as Egypt, Dubai and Saudi Arabia.

The panic has underscored the scale of the challenge for Chinese leaders in seeking to curb excess investment and guide the economy toward a more sustainable pace of growth.

“My biggest concern is that global growth momentum is very fragile. The most important step is to see China take further action to try to bring their economy to a 7 per cent growth path,” said Rajiv Biswas, Asia-Pacific chief economist for IHS.

In currency trading, the dollar was at 119.99 yen on Monday, down from 122.05 yen on Friday. The euro rose to $1.1517 from $1.1388. Currencies fell hard in developing economies — particularly those that rely heavily on the export of commodities and oil, both of which China is a big consumer. The Russian ruble dropped 2.3 per cent to a seven-year low.

In commodity markets, benchmark US crude dropped $2.14 to $38.29 a barrel in electronic trading on the New York Mercantile Exchange. It fell 87 cents a barrel on Friday. Brent crude, a benchmark for international oils used by many US refineries, fell $2.50 to $42.96 a barrel.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest World News, download Indian Express App.

0 Comment(s) *
* The moderation of comments is automated and not cleared manually by indianexpress.com.
Advertisement
Advertisement
Advertisement
Advertisement