The Asian stock markets fell sharply after the Nasdaq completed the largest reversal since 2001 the night before.
The global stock market turmoil continues on the Asian stock markets at dawn. Large effects affect several of the markets.
This is the development on the Asian stock exchanges at 06.15:
- The Nikkei 225 in Tokyo falls 2.20 percent
- Hang Seng in Hong Kong is down 1.24 percent
- Kospi in Seoul falls 2.84 percent
- Shanghai Composite falls 1.12 percent
- The FTSE Straits Times in Singapore is down 1.14 percent
- The ASX 200 in Sydney is down 2.49 percent
The development comes after an unusually hectic day in the stock markets. On Monday afternoon, the main index on the Oslo Stock Exchange fell 3.45 percent, but that was just a taste of the drama Wall Street was about to offer.
At worst, the Nasdaq 100 index was down nearly five percent before the turnaround began. Not since 2001 has the index recovered as much in the course of a trading day, according to Bloomberg.
In the end, all the US indices ended in a positive.
– Effects that propagate
The prospect that the Federal Reserve on Wednesday will announce the start of a new rate hike cycle has been cited by several as the reasons for the troubled markets.
– It’s really quite simple. Given the big picture, there are effects that are propagating in the markets, now that monetary policy is about to normalize, said Olav Chen, head of allocation and global interest rates in Storebrand Asset Management to E24 on Monday.
– We have been talking about fear of interest rates and fear of inflation for a long time now, and this is going in jerks, Chen said.
On Tuesday morning, the Central Bank of Singapore has chosen to adjust the currency band, which it uses to control monetary policy in the country. The move was surprising and for the first time since 2015 the central bank goes outside the normal cycle, according to Reuters.
Tense security situation
Internationally, the tense situation between Russia and Ukraine is also cited as a factor in the stock market decline.
On Monday, NATO announced that it would send more ships and fighter jets for deployment in Eastern Europe, while the United States was considering strengthening its military presence in the area.
In the Russian stock market, the tense situation has left its mark in recent weeks. So far this year, the RTS index in Moscow is down close to 20 percent, after the index fell more than eight percent on Monday.