Global markets continue to dive
Chinese stocks recover while other bourses across Asia fall sharply.
Glenn Maguire, chief economist for Asia at Societe Generale, said: “What we are seeing is the echo of the fall in the Chinese market and more importantly the fall that we saw in the US equity market overnight.”
In Sydney share prices plummeted more than three per cent on opening, the biggest single-day fall in six years, before ending the morning down more than two per cent.
Indian share prices fell 3.17 per cent in early deals. Stocks fell by more than three per cent in Hong Kong and by over four per cent in Singapore, while Kuala Lumpur and Manila both saw plunges of over eight per cent.
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In Japan, the Nikkei dropped 1.52 per cent to 17,826.36 at the start of trade on Wednesday, falling below 18,000 for the first time in nearly a week.
Computer glitch
But the explanation for the global wave of selling that has swept global markets computer may be more trivial: a computer glitch.
The media company that manages the Dow Jones index of 30 blue chip stocks, said it discovered shortly before 1400 (1900 GMT) that its computers were not properly handling the day’s huge volume in trades at the New York Stock Exchange.
It switched to a backup computer, and the result was a massive drop in the index as the secondary system took over processing shortly before 1500 (2000 GMT).
The Dow plunged about 200 points almost instantly, and was down as much as 546 points – its worst single-session decline in more than five years.