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US markets opened the new year with their worst first day performance since the dark days of 2008

The struggles of China’s stock markets are causing shocks felt around the world.

Wall Street Traders gather at a post on the floor of the New York Stock Exchange on 29 September 2008. Yesterday's US market-performance saw the worst first day of trading since January of that year. Source: AP/Press Association Images

US STOCK MARKETS have suffered their worst opening-day performance to a new year since 2008.

The Dow Jones index closed down 1.58%, the lowest first day return since 2 January 2008. Meanwhile the S&P 500 had its sixth worst opening day since the 1920s in finishing down 1.5%.

At one stage yesterday the Dow Jones had fallen more than 2.5%, setting it on course for the worst opening day of trading since the height of the Great Depression in 1932.

Markets worldwide are jittery to say the least on foot of the market troubles being seen in China.

While the Shanghai Composite index has recovered slightly over the last day, after massive selling saw the index value plummet triggering a “circuit breaker” shut down, this is chiefly attributable to massive intervention by the Chinese government.

In addition to the shut down, which closed Chinese markets in a bid to stem the negative flow, the Communist government has pumped money into the system via the purchase of equities while major investors are banned from selling stock beyond the end of this week.

China sports the world’s second-largest economy. Any slowdown there would be expected to result in a slowdown in growth around the world.

Ugly start

South Korea Financial Markets A currency trader rubs his eyes at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, today Source: Ahn Young-joon

Poor manufacturing performance and skepticism over the Chinese economy, coupled with the ongoing instability in the Middle East as Saudi Arabia and Iran cut diplomatic ties, is fueling the spiral being seen in markets across Asia.

“This situation has gotten the market off to a very ugly start,” said Peter Cardillo, chief market economist at First Standard Financial.

Low manufacturing returns in the US are also in part to blame for the extensive jitters being seen there yesterday.

European markets have held relatively steady after a rough day’s trading yesterday on the back of concerns over China.

European stock markets rebounded in opening deals on Tuesday, after tanking the previous day on fresh evidence of China’s economic slowdown.

In initial trade today, London’s benchmark FTSE 100 index rallied by almost 1.1% to 6,158.7 points compared with close of business on Monday.

With AFP

Read: The United States is suing Volkswagen over the emissions scandal

Read: The Chinese stock market is in deep, deep trouble, and it’s bad news for everyone

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