Financial markets in Japan, Singapore, Korea and Australia follow Wall Street’s down day
A stock market rout that started on Wall Street rolled through Asia, driving China’s benchmark to a four-year low Thursday and knocking down indexes in Japan, Korea and Australia.
The Shanghai Composite index plunged 5.2 percent to its lowest level since November 2014, and Japan’s Nikkei 225 fell by an unusually wide margin of almost 4 percent. Markets across Southeast Asia recorded similar declines.
“Equity markets were pulverized today,” with investors in “full out retreat,” Stephen Innes of OANDA said in a commentary. The “latest sneeze” from Wall Street “could morph into a global markets pandemic,” he added.
Interests rates worry investors
Investors are wary of possible further U. S. interest rate hikes, which will raise the cost of corporate borrowing and weigh on economic growth.
On Wednesday, President Donald Trump said the Federal Reserve “is making a mistake” with its campaign of rate increases. “I think the Fed has gone crazy,” he charged.
“Equity investors are surprised by the pace at which rates have risen,” said Marcella Chow, global market strategist at J. P. Morgan Asset Management in a report.
Tariff fight, too
Sentiment also has been dampened by the spreading U. S.-Chinese tariff fight over Beijing’s technology policy.
