HONG KONG - The volatility in global markets extended into another day, with major stock market indexes in Asia opening significantly lower on Thursday morning after Wednesday brought whipsaw trading in the United States and a sharp sell-off in Europe.
Japan's benchmark Nikkei 225 share index fell as much as 2.6 percent Thursday morning, and was trading 2.1 percent lower as of 11 a.m. in Tokyo.
Australia's main index was down about 0.9 percent, while the Hang Seng Index in Hong Kong fell about 1 percent.
Investors have grown increasingly concerned over signs that global economic growth is faltering, and that policy makers may lack the monetary and fiscal tools necessary to stop the slide. Those fears tend to focus on the situation in Europe, where shares fell sharply on Wednesday. The British FTSE 100 index closed 2.8 percent lower, the German DAX index was down 2.9 percent and the main index of Italian shares fell more than 4 percent.
The rout has triggered a rush into government bonds, perceived as a relative safe haven in times of volatility, which on Wednesday pushed down the yields on American and German government debt.
In Asia, concerns are focused on what policy makers in Japan can do to address declining growth. The rally triggered by the stimulatory measures introduced in early 2013 by Prime Minister Shinzo Abe appears largely to have fizzled in recent months, and a newly introduced consumption tax hike has dragged down consumer spending. The Japanese economy shrank by 7.1 percent in the second quarter after the sales tax increase.
Investors are also concerned about slowing growth in China. Beijing in recent months has sought to address the slowdown through a number of narrowly targeted mini-stimulus measures aimed, for example, at boosting the availability of financing for agriculture and subsidized housing. Despite the steps, the economy appears to still be cooling. China also pushed earlier this year to weaken the currency, the renminbi - a move that tends to benefit exporters.
Dizzied by the turmoil, Wall Street experts agreed on one thing: The jarring day showed that fear had finally returned to markets that had become disconcertingly complacent.
Posted by Unknown on Thursday, October 16, 2014 - Rating: 4.5
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