NEW YORK: US stocks have tumbled anew in another trading session with big swings, as investors remain on edge after several days of volatile trading. Major indexes cut their losses somewhat in afternoon trading after falling more than 2 per cent earlier.
The benchmark S&P 500 was still set for a second day of declines, following sharp swings in recent sessions including its biggest drop in more than six years that pulled equities away from record highs. The retreat in equities has been long awaited by investors as the market has climbed steadily to record high after record high with few bumps.
The recent sharp sell-off was kicked off by concerns over rising inflation and bond yields, sparked by Friday’s January US jobs report, with investors pointing to additional pressure from the violent unwind of trades linked to bets on volatility staying low. The 10-year US Treasury note yield rose as high as 2.884 per cent, nearing Monday’s four-year peak of 2.885 per cent, after the Bank of England said interest rates probably need to rise sooner than previously expected.
“What we’re seeing today is continued concerns around interest rates going higher, around valuations in the stock market,” said Chris Zaccarelli, chief investment officer with Independent Advisor Alliance in North Carolina. In late afternoon trading, the Dow Jones Industrial Average was down 2.12 per cent, at 24,497.56, the S&P 500 had lost 1.88 per cent, to 2,647.33 and the Nasdaq Composite had dropped 2.02 per cent, to 6,949.55.
LONDON: European shares on Thursday closed in negative territory as volatility made a brutal comeback and ended a short-lived rebound after the beginning of the week’s global sell-off. Europe’s VSTOXX volatility index jumped to 32, its highest since the UK’s Brexit referendum, and all European bourses ended deep in the red.
Europe’s STOXX 600 share index fell 1.8 per cent, France’s CAC 40 lost 1.98 per cent to 5,151.68 and Germany’s DAX closed 2.62 per cent lower at 12,260.29. In Frankfurt, growth-sensitive stocks such as Volkswagen or BASF, lost 3.8 per cent and 3.3 per cent respectively.
The UK’s top share index also fell after the Bank of England raised the prospect of higher interest rates, sending the pound higher which weighed on big British overseas earners.
The FTSE was closed 1.49 per cent lower at 7,170.69 points. The index is down 6.7 per cent in the year to date, making it the worst performer among top European bourses. The Bank of England said that interest rates probably need to rise sooner and by a bit more than it thought only three months ago, which boosted sterling.
The rise in the currency weighed on the FTSE’s predominantly US dollar-earning firms, with shares in heavyweight consumer staples British American Tobacco, Reckitt Benckiser and Unilever dropping between 1.8 per cent and 3.2 per cent.
TOKYO: Asian markets were mixed with Japan and Hong Kong lifting but China fell with its key mainland index sinking to a six-month low. Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.25 per cent. Japan’s Nikkei index closed up 1.13 per cent at 21,890.86.
Hong Kong stocks regained some composure on Thursday after a brutal sell-off earlier in the week, with the benchmark Hang Seng Index ending the session slightly higher following five consecutive days of losses.
The Hang Seng may have found a floor after posting its biggest one-day percentage loss since July, 2015 on Tuesday. It closed up 0.42 per cent at 30,451.27, while the Hang Seng China Enterprises index fell 0.43 per cent to 12,380.38.
In China, Shanghai’s benchmark index hit a six-month low, even as data showed the country’s trade performance in January had exceeded expectations. The Shanghai Composite index closed down 1.43 per cent at 3,262.05 points and its blue-chip CSI300 index fell 0.95 per cent to 4,012.05.