Global stocks tumble as Wall Street braces for more losses
By PAN PYLAS and ELAINE KURTENBACH
LONDON — Stock markets around the world took a battering Tuesday, following a dramatic sell-off on Wall Street that triggered concerns that a potentially healthy pullback from record highs could turn into a bear market.
Hopes that Wall Street won’t repeat the scale of Monday’s losses helped limit the selling during European trading hours. Futures markets suggested another, but more limited drop, in the U.S., with the Dow and S&P 500 futures down 0.9 percent and 0.5 percent.
The drop, which gathered pace Monday when the Dow Jones industrial average posted its biggest percentage decline since August 2011, has been fueled by fears the U.S. Federal Reserve will raise interest rates faster than expected due to a pick-up in wages.
That has fed into widespread concerns that markets were stretched following a strong run over the past year that pushed many indexes to record highs. Some also questions the possible role of computer-driven algorithmic trading in the precipitous declines.
“If investors look at underlying earnings growth and the fundamentals of the global economy, there is reason for optimism,” said Neil Wilson, senior market analyst at ETX Capital.
“However once this kind of stampede starts it’s hard to stop.”
Among the biggest fallers on Tuesday was Tokyo’s Nikkei 225 stock average, which ended 4.7 percent lower at 21,610.24, having earlier been down a massive 7 percent. All other Asian markets tanked, too, including the Shanghai Composite index, which closed 3.4 percent lower at 3,370.65 and Hong Kong’s Hang Seng, which skidded 5.1 percent to 30,595.42. Australia’s benchmark S&P ASX 200 slid 3.2 percent to 5,833.30 and South Korea’s Kospi declined 1.5 percent to 2,453.31.
The selling persisted into European trading hours, though at a more moderate pace. The FTSE 100 index of leading British shares was 2.3 percent lower at 7,170 while the […]