Stock Markets around the world are cratering in pre-market futures trading this morning. It's going to be a bad day in matters financial.
Japan’s benchmark Nikkei 225 stock index plunged as much as 7.1% early Monday before recovering some lost ground, extending sell-offs that began last week.
At one point, the Nikkei shed more than 2,500 points. By the time of the Tokyo market’s midday break, the index was down about 5.5%, or about 1,900 points, at 33,945.43.
The market’s broader TOPIX index fell as much as 7.8% before recovering to trade down 6.6%.
Stocks tumbled Friday on worries the U.S. economy could be cracking under the weight of high interest rates meant to tame inflation. Early Monday, the future for the S&P 500 was 1.4% lower and that for the Dow Jones Industrial Average was down 1.5%.
“To put it mildly, the spike in volatility-of-volatility is a spectacle that underlines just how jittery markets have become,” Stephen Innes of SPI Asset Management said in a commentary. “The real question now looms: Can the typical market reflex to sell volatility or buy the market dip prevail over the deep-seated anxiety brought on by this sudden and sharp recession scare?”
A report showing hiring by U.S. employers slowed last month by much more than expected has convulsed financial markets, vanquishing the euphoria that had taken the Nikkei to all-times highs of over 42,000 in recent weeks.
Investors will be watching for data on the U.S. services sector from the U.S. Institute for Supply Management due later Monday that may help determine if the sell-offs around the world are an overreaction, Yeap Jun Rong of IG said in a report.
Elsewhere in Asia, Taiwan’s Taiex saw the largest decline, sinking 7.4%. Market heavyweight and computer chip maker Taiwan Semiconductor Manufacturing Co. lost 5.3%.
Hong Kong’s Hang Seng index lost 2.1% to 16,945.51 and the S&P/ASX 200 in Australia declined 1.3% to 7,725.40. South Korea’s Kospi declined 3.4% to 2,570.64.
On Friday, the S&P 500 sank 1.8% for its first back-to-back losses of at least 1% since April. The Dow Jones Industrial Average dropped 610 points, or 1.5%, and the Nasdaq composite fell 2.4% as stocks retreated around the world and back to Wall Street.
Friday’s losses for tech stocks dragged the Nasdaq composite 10% below its record set last month. That level of drop is what traders call a “correction.”
