Asian Markets Plunge Amid Global Economic Fears

Strategic Insights -

Asian stock markets plummeted on Tuesday, extending the decline that started in Europe on Monday. The Hang Seng index in Hong Kong closed 3% lower, with all shares losing ground. China's Shanghai index shed almost 2%, and Japan's Nikkei slumped by 4%, hitting its lowest level since early January. The European stock markets also fell, with the FTSE 100 index losing 62 points, or around 1%, to 5892, its lowest level since the "Great Fall of China" a month ago.

Key Takeaways:

  • Asian stock markets plummeted on Tuesday, with the Hang Seng index in Hong Kong closing 3% lower and the Shanghai index shedding almost 2%.
  • Japan's Nikkei slumped by 4%, hitting its lowest level since early January, and the FTSE 100 index in London fell 62 points, or around 1%, to 5892.
  • The European stock markets also fell, with the DAX and CAC 40 indexes dropping by 1.5% and 0.5%, respectively.
  • Investors are fearing a global recession, citing Japan's struggling economy, Europe's economic slowdown, and the unfolding crisis at Volkswagen.
  • Glencore, a commodity mining and trading firm, tumbled by 29% on Monday, and its shares fell further on Tuesday, but managed to rise by 8% mid-morning.
  • India's central bank cut interest rates by 50 basis points to 6.75%, in response to fears of a global downturn.
  • Australia's stock market also fell sharply overnight, shedding almost 4% led by heavy declines in the mining and energy sector.

Statistics:

  • The Hang Seng index closed 3% lower, with all shares losing ground.
  • China's Shanghai index shed almost 2%.
  • Japan's Nikkei slumped by 4%, hitting its lowest level since early January.
  • The FTSE 100 index fell 62 points, or around 1%, to 5892.
  • Glencore's shares fell 29% on Monday, and 5% on Tuesday, before rising 8% mid-morning.
  • India's central bank cut interest rates by 50 basis points to 6.75%.
  • Australia's stock market shed almost 4% led by heavy declines in the mining and energy sector.

Sources:

  • Bloomberg
  • Thomson Reuters
  • AFP/Getty Images
  • Caroline Hyde (Bloomberg)
  • Dan Davies (@dsquareddigest)
  • Holger Zschaepitz (@Schuldensuehner)
  • IGSquawk (@IGSquawk)
  • Guy Johnson (@GuyJohnsonTV)
  • Wall Street Journal (@WSJ)