Stock Markets Plunge Worldwide on Economic Concerns
On Monday, Japan’s benchmark Nikkei 225 index plummeted 12.4% as investors grew increasingly worried about the state of the U.S. economy. This sharp decline added to the wave of selling that hit global markets, with the Nikkei closing down 4,451.28 points at 31,458.42 points. The broader Topix index also fell 12.8% as selling intensified in the afternoon.
European Markets Follow Suit
Following the massive sell-off in Asia, European markets also saw significant declines on Monday. The Frankfurt stock market in Germany dropped by more than 3%, while the Paris and London stock markets fell by 2.6% and 2.3%, respectively. In addition, the Milan market fell by 4% and the Madrid market fell by 2.8%.
Concerns Rise Over U.S. Economy
Friday’s report on U.S. employers showed a sharp slowdown in hiring, causing alarm among investors. This unexpected development shook financial markets and erased the recent record highs the Nikkei had reached. The uncertainty over the pace of interest rate cuts by the Federal Reserve and other major issues has contributed to the heightened volatility in global stock markets.
The spike in volatility has left investors on edge, with many questioning whether the sell-off is an overreaction. Concerns are mounting that the high interest rates could potentially lead to a recession in the U.S. economy, prompting a wave of selling across world markets.
As investors await further data on the U.S. services sector, the Institute for Supply Management’s report later on Monday could provide insight into whether the current market turmoil is justified.