SYDNEY: Asian share markets sank in a sea of red on Thursday (Oct 11) after Wall Street suffered its worst drubbing in eight months, a conflagration of wealth that could threaten business confidence and investment across the globe.
It also raised the stakes for U.S. inflation figures due later on Thursday as a high outcome would only stoke speculation of more aggressive rate hikes from the Federal Reserve.
Dealers could find no single trigger for the scare, more a confluence of factors.
“Equity markets are locked in a sharp sell-off, with concern around how far yields will rise, warnings from the IMF about financial stability risks and continued trade tension all driving uncertainty,” summed up analysts at ANZ.
MSCI’s broadest index of Asia-Pacific shares outside Japan shed 2.7 per cent to its lowest in 18 months.
Japan’s Nikkei fell 3.4 percent, the steepest daily drop since March, while the broader TOPIX lost around US$195 billion in market value.
Shanghai shares touched their lowest since late 2014, while China blue chips slid 3 per cent.
Hong Kong stocks dropped more than three per cent at the opening. The Hang Seng Index was down 3.26 per cent in early trade.
On Wall Street, the S&P500’s sharpest one-day fall since February wiped out around US$850 billion of wealth as technology shares tumbled on fears of slowing demand.
The S&P 500 ended Wednesday with a loss of 3.29 per cent and the Nasdaq Composite 4.08 percent, while the Dow shed 2.2 per cent.
The blood letting was bad enough to attract the attention of U.S. President Donald Trump, who pointed an accusing finger at the Fed for raising interest rates.
“I really disagree with what the Fed is doing,” Trump told reporters before a political rally in Pennsylvania. “I think the Fed