ISSN: 2056-3736 (Online Version) | 2056-3728 (Print Version)


Asian stock markets are braced for another pounding Tuesday after the Dow Jones Industrial Average hit an 18-month closing low on global growth fears.

“Meltdown was the only word that can be used to describe price action in equities,” said ANZ Bank Senior Economist Mark Smith. “For those hoping for a quiet day of trading today in the Asian market session, think again.”

“Over the day, I think you can expect some fairly significant losses across the board. We are going to see continuing uncertainty, continuing volatility,” said Forsyth Barr investment adviser Adrian Vance.

Fresh signs of a slowdown in China, the world’s second-largest economy, have jolted stocks, bonds, currencies and commodities in recent days. Investors were further rattled Monday by a lack of fresh steps from Chinese authorities over the weekend to stem the selloff.

In Europe, the pan-European Stoxx Europe 600 closed 5.3% lower, the biggest one-day decline since December 2008. Germany’s DAX fell 4.7% and has now lost more than 20% since its April peak, meaning the index has entered a bear market.

In the U.S., the Dow plunged as much as 1,089 points in the first six minutes of trading before paring losses as traders said mutual funds and other investors began stepping in to buy up beaten-down stocks. It ended down 3.6%. The S&P 500 dropped 3.9%, joining the Dow industrials in correction territory, defined as a decline of 10% from a recent peak. The Nasdaq Composite fell 3.8%.

“The price action overnight shows skittish markets running for cover,” said Stuart Ive, a private client adviser at New Zealand trading firm OM Financial.

New Zealand’s NZX-50 opened down 2.3% and Australia’s futures are pointing down.

Chris Weston, chief market strategist at IG expects the S&P/ASX 200 to open at 4,790. On Monday it dropped 213.3 points, or 4.1%, to 5001.3 amid broad selling.