Japan's Nikkei index has its worst day; world markets quake over risk to US eco

Japans benchmark stock index plunged 124 per cent on Monday compounding a global market rout set off by investor concerns that the US economy could be headed for recessionA report Friday showing hiring by US employers slowed last month by much more than expected has convulsed financial markets vanquishing the euphoria that had taken the Nikkei 225 to alltimes highs of over 42000 in recent weeksThe shakeup began just a couple of days after US stock indexes had jumped to their best day in months after Federal Reserve Chair Jerome Powell set the stage for possible rate cuts to begin in SeptemberBut after Fridays jobs report worries are rising the Fed may have kept its main interest rate at a twodecade high for too long raising risks of a recession in the worlds largest economy A rate cut would make it less expensive for US households and companies to borrow money but it could take time for the effects to boost the economyUntil Friday there had been relatively few huge market swings in the past yearA bonanza around artificial intelligence technology helped drive Big Tech stocks higher while other areas of the market held up amid rising hopes for coming cuts to interest rates by the Federal Reserve But professional investors have been warning that shakier times may be ahead given uncertainty about how quickly the Fed will cut interest rates and other big questionsOn Monday the Nikkei closed down 445128 points at 3145842 It had dropped 58 per cent on Friday making this its worst twoday decline ever Its worst singleday rout was a plunge of 3836 points or 149 per cent on October 19 1987 a global markets crash that was dubbed ldquoBlack Mondayrdquo but proved to be only a temporary setback despite fears it might have augured a worldwide downturnEuropean markets also opened lower Monday with Germanys DAX down 23 per cent at 1726700 The CAC 40 in Paris lost 19 per cent to 711433 and the FTSE 100 in London was 21 per cent lower at 800419Darkening the outlook for trading on Wall Street early Monday the future for the SampP 500 was 25 per cent lower and that for the Dow Jones Industrial Average was down 16 per centShare prices have fallen in Tokyo since the Bank of Japan raised its benchmark interest rate on Wednesday The Nikkei is now down 38 per cent from a year agoThe Japanese yen also has fallen sharply trading at 14237 yen down from 14645 late Friday and sharply below its level of over 160 yen a few weeks agoThe euro rose to USD 10952 from USD 10923The latest setback has hit markets heavily weighted toward computer chipmakers like Samsung Electronics and other technology shares on Monday South Koreas Kospi plummeted more than 9 per cent as Samsungs shares sank 103 per cent It closed 88 per cent lower at 244155Taiwans Taiex also crumbled losing 84 per cent as Taiwan Semiconductor Manufacturing Co the worlds biggest chip maker dropped 98 per centldquoTo put it mildly the spike in volatilityofvolatility is a spectacle that underlines just how jittery markets have becomerdquo Stephen Innes of SPI Asset Management said in a commentary ldquoThe real question now looms Can the typical market reflex to sell volatility or buy the market dip prevail over the deepseated anxiety brought on by this sudden and sharp recession scarerdquo The VIX an index that measures how worried investors are about upcoming drops for the SampP 500 was up about 26per cent as of early Monday Bitcoin which recently had surged to nearly USD 70000 was down 16per cent at USD 5316000Oil prices slipped with US benchmark crude oil giving up 74 cents to USD 7278 per barrel Brent crude the international standard lost 67 cents to USD 7614 per barrelInvestors will be watching for data on the US services sector from the US Institute for Supply Management due later Monday that may help determine if the selloffs around the world are an overreaction Yeap Jun Rong of IG said in a reportEven though worries over weakness in the US economy and volatile markets have rippled around the world the US economy is still growing and a recession is far from a certaintyBut the mood was decidedly darkHong Kongs Hang Seng index lost 22 per cent to 1657997 and the SampPASX 200 in Australia declined 37 per cent to 764960The Shanghai Composite index which is somewhat insulated by capital controls from other world markets edged higher but then gave way losing 15 per cent to 286256The SampP 500s 18per cent decline Friday was its first backtoback loss of at least 1per cent since April The Dow Jones Industrial Average dropped 15 per cent and the Nasdaq composite fell 24 per cent taking it to 10 per cent below its record set last month That level of drop is what traders call a ldquocorrectionrdquoThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever