European stocks open sharply lower
Britain’s FTSE 100 drops nearly 2 per cent as global market slump enters second day.
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While traders said there was little fresh news driving markets on Wednesday, a build-up of worries this week – from Iranian nuclear tensions to US mortgage market worries to China’s sudden stock market plunge – have all been sufficient to dramatically alter market sentiment.
‘Fear index’
Wall Street’s slide of more than 3 per cent on Tuesday, also catapulted a key measure of equity market volatility – known as the “fear index” and a closely-watched gauge of market risk aversion – more than 64 per cent higher.
| Timeline: biggest market drops on the NYSE |
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October 19, 1987: The Dow Jones index drops 22.6 per cent, falling 508 points to 1,738.74 on “Black Monday”, the biggest one-day drop in stock market history. Volume surges to an unprecedented 604 million shares, reaching 608 million shares the next day.
October 27 1997: The Asian financial crash spurs a global selloff; the Dow Jones index slumps 7.2 per cent, or 554 points, in its biggest single-day points drop. The NYSE’s “circuit-breaker” is triggered for the first time to halt trading at 3:30pm.
April 14, 2000: The Dow drops 5.6 per cent, or 617 points – a new steepest point decline in a single day.
September 17, 2001: The Dow falls 6.9 per cent when trading resumes after a four-day halt following the 9/11 attacks. It slides 659.62 points, with a record volume of 2.37 billion shares traded.
February 27, 2007: The Dow index falls 3.3 per cent, or 416 points, spooked by a collapse in Chinese stocks and weak US manufacturing data. Investors pour money into less-risky bonds as the index experiences its worst points slide since the aftermath of the September 11, 2001 attacks.
Sources: Reuters data for market performance from 1987 onwards, The New York Stock Exchange Group Timeline |
But even as stock markets continued to slide, there were some tentative signs of calmer trading elsewhere.
China‘s main Shanghai stock index, whose 9 per cent dive on Tuesday on regulatory concerns was cited by some as fuelling the global sell-off, bounced back almost 4 per cent.
Earlier, Asian stock indexes mirrored the US decline, with Hong Kong’s Hang Seng Index down 2.1 per cent and the H-share index of Chinese shares listed in Hong Kong off 3 per cent well above earlier lows.
Japan‘s Nikkei average lost 2.9 per cent, Australia‘s benchmark S&P/ASX 200 index fell 2.7 per cent and Seoul‘s KOSPI shed 2.6 per cent. Indian stocks trimmed early losses and the BSE index was down about 2 per cent.
Tatsutyuki Kawasaki at Kaneyama Securities, said: “The real question is whether New York will be able to rebound tonight. If it doesn’t, investors are going to start looking for the reasons behind all this selling.”