Stock Prices Plummet Worldwide as Fears Continue
As selloff on Wall Street on Wednesday sparked fears of contagion worldwide, sending Asian markets broadly lower and positioning European markets for an expected triple-digit loss on the open today. As of 1:06 p.m. HK/SIN, the Nikkei 225 was down 3.90 percent, Hong Kong’s Hang Seng Index was down 3.76 percent and the Shanghai Composite was own 4.34 percent. The losses followed the biggest one-day declines for the S&P 500 and the Dow Jones Industrial Average since February. The Nasdaq suffered its worst sell-off since June 2016.
But stock markets weren’t the only ones subject to sell-offs and contagion. Nearly $13 billion of cryptocurrency value was eradicated on Thursday in just a few hours, with XRP and Ethereum plummeting over 10 percent and bitcoin falling around 4 percent on Thursday morning. Bitcoin was trading at $6,226.00 in the early afternoon on Thursday, a loss of $258.50 per coin since yesterday.
The International Monetary Fund (IMF) warned earlier this week that the trade tensions, including but not limited to the ones between the U.S. and China, could lead to a “sudden deterioration in risk sentiment, triggering a broad-based correction in global capital markets and a sharp tightening of global financial conditions.” Looking at recent stock market movements, the sentiment seems to be spot-on. Still, some analysts have commented that the global stock decline was not caused by any one factor, but rather was building for time and was simply reflecting a global desire to take profits while available.
U.S. President Donald Trump reacted to the market turmoil by saying that it’s a “correction that we’ve been waiting for for a long time.” Trump went on to criticize the Federal Reserve (again) for its tightening policy.