Markets Right Now: Dow down 1000 points as stocks sink steadily

Jon Howard
February 11, 2018

Most sectoral indices were trading in the red in the Korean region.

Global markets have this week been swept up in a wave of selling while investors fret about the impact of USA interest rates tightening.

Hang Seng Index (HSI) is the primary index of equities listed on the Stock Exchange of Hong Kong (SEHK).

Hong Kong shares, meanwhile, slumped to their biggest weekly loss since the global financial crisis.

Sydney fell 0.9 percent, Singapore shed 1.7 percent and Seoul was 1.8 percent off. Wellington, Manila and Taipei were also hammered. It lost 7.81 per cent this week.

It was the second time in history that the Dow has lost more than 1,000 points in a single day.

After turmoil in the United States and Asia, stock markets in Europe managed to find a steadier footing Friday.

The HSI has now lost all the gains it enjoyed over a stellar January, as the sell-off that has haunted markets across the globe returned.

The Bank of England said Thursday that it could increase rates more quickly than expected because of a booming global economy and rising domestic prices.

The week had started badly after last Friday's strong USA jobs report that also showed rising United States wage growth, increasing speculation the Federal Reserve will lift rates more than the three times already expected this year. Hong Kong's Hang Seng index lost 2.5 percent.

Data showing surging United States production has sent crude spiralling downward, with both main contracts about 10 percent off their January highs, and offsetting a cap deal between OPEC and Russian Federation. Stocks in Taiwan were down slightly and Southeast Asian markets were mixed.

The plunge in Shanghai has left the the market at its lowest point since last June.

With everything happening, it's still too early to jump into the market for bargains, he said. Futures showed Wall Street was due for a lackluster start.

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Sukrit Vijayakar of Trifecta Consultants said the record high United States output figure "suggests that it is now possible to ramp up production even higher quite soon" which would be negative for a market trying to soak up excess supplies to balance them with demand.

Technology companies, the leading sector over the past year, and banks fell the most.

'We are still in the depth of market volatility as sentiment was hurt by the double whammy of USA market turmoil and deleveraging efforts at home, ' Wu Kan, a Shanghai-based fund manager at Shanshan Finance, told Bloomberg News. "Risk appetite has dropped sharply and I don't think the situation will get any better before the Chinese New Year holiday".

Ping An Insurance dropped 6.61 per cent to 64.43 yuan and New China Life Insurance plunged 9.05 per cent to 51.63 yuan. The contract dropped $1.60, or 2.5 per cent, to finish at $61.79 a barrel on Wednesday.

In the past, China´s government has sometimes moved to prop up falling stock markets, but a hedge fund manager said that was unlikely this time.

'If 10-year, risk-free rates keep climbing toward five per cent, stocks with earnings multiples of 30 or more will become increasingly expensive, so they're getting dumped by institutional investors, ' said Gu, Shanghai-based chief investment officer at Ucom Investment Co.

As a free float adjusted index, HSI excludes restricted shares held by company insiders and other strategic investors such as government and venture capitalists because these holdings tend to be inactive.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.87 percent.

The yuan weakened against the dollar in thin volume, and the Chinese currency was on track for its first weekly loss in nine weeks.

BOUNCING BACK: Wynn Macau, the China arm of United States company Wynn Resorts, jumped almost seven per cent in Hong Kong after the company announced that two executives are replacing Steve Wynn as chairman and CEO. It retreated $70 cents on Thursday to $68.81.

ANALYST'S VIEW: "Risk sentiment continues to be wobbly in markets, with USA equities notching a loss at the close, while Brent prices fell sharply to $65 overnight", Mizuho Bank said in a daily commentary.

More notable recent China Mining Resources Group Limited (HKG:0340) news were published by: Reuters.com which released: "Australia's AWE serves Mineral Resources notice to match Mitsui offer" on January 31, 2018, also Bloomberg.com with their article: "China Wealth Fund Joins Fray for $2 Billion Rio Portfolio" published on February 08, 2018, Reuters.com published: "Australia's Mineral Resources to buy AWE Ltd for $403 million" on December 20, 2017.

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