Asia’s benchmark stock indexes collapsed Tuesday, as Monday’s massive selloffs on Wall Street rolled across the globe.
Japan’s Nikkei 225 index lost as much seven percent of its value at one point during the trading session, before closing at 21,610 points, a loss of nearly five percent. Hong Kong’s Hang Seng index followed suit, dropping just over five percent in its worst trading day since August 2015.
The benchmark indexes Australia and South Korea also suffered serious losses.
In early Europe trading London’s FTSE 100 was down 3.5 percent at 7,081 points.
Asian markets were caught in the ripple effect of Monday’s 1,175-point loss on the Dow Jones Industrial Average, marking the biggest point decline in history. The S&P (Standard and Poor’s) 500 also had a bad day, losing just over four percent to finish at 2,648 points.
The stock market has now lost about a trillion dollars in value since Friday, when the Dow lost 666 points. That drop followed a solid jobs report that showed the U.S. economy adding 200 thousand jobs and wages rising at the fastest pace in a decade. The tighter labor market and rising wages prompted investor fears of higher inflation and the possibility that the U.S. Federal Reserve would raise interest rates faster and higher than they have in recent years.
Analysts who spoke with VOA had been expecting a stock market “correction” (a decline of about 10% from recent highs) as a result of the record run up in stock prices this year.