Global stocks sink after major U.S. index enters correction
By JOE McDONALD
BEIJING — Global stock markets sank Friday after the Dow Jones industrials on Wall Street plummeted more than 1,000 points, deepening a week-long sell-off.
Markets followed U.S. stocks lower after the Dow, coming off a record high, entered a “correction” — that is, a 10 percent decline from its latest peak — for the first time in two years.
In Europe, France’s CAC 40 lost 1.2 percent to 5,087, Britain’s FTSE 100 shed 0.7 percent to 7,122 and Germany’s DAX fell 1.2 percent to 12,110. All three had dropped around 2 percent the day before.
Asian markets fell more sharply. The Shanghai Composite Index tumbled 5.5 percent before ending the day down 4 percent at 3,129.85. Tokyo’s Nikkei 225 lost 2.3 percent to 21,382.62 and Hong Kong’s Hang Seng retreated 3.1 percent to 29,507.42.
On Wall Street, futures for the Dow and the Standard & Poor’s 500 were down 0.1 percent and up 0.2 percent, respectively, though the actual market open does not always follow the futures closely in times of volatility.
Financial analysts regard corrections as a normal event but say the latest unusually abrupt plunge might have been triggered by a combination of events that rattled investors. Those include worries about a potential rise in U.S. inflation or interest rates and whether budget disputes in Washington might lead to another government shutdown.
“Markets are down again today, maybe unnerved by fears that the U.S. Senate will not pass a budget bill in time to avoid a U.S. government shutdown,” said Rob Carnell of ING in a report. “With financial markets vulnerable at the moment, this was not great timing for such political brinksmanship.”
Chinese markets fell despite unexpected strongly trade data Thursday. Elsewhere in Asia, Seoul’s Kospi 1.8 percent to 2,363.77 and Sydney’s S&P-ASX 200 lost 0.9 percent to 5,838.00. India’s Sensex retreated […]