The global market experienced a sharp decline adding to the global stock market meltdown brought on by U.S. President Donald Trump’s trade war and China’s aggressive retaliation for unanticipated high tariffs.
Germany’s Dax opened down 9%, while London’s FTSE was about 5% lower. European markets were, on the whole, faring better than Asian markets in early trade. Japan’s benchmark Nikkei 225 index closed 7.9% lower, while the broader Topix finished down 7.7%. Tech giant Sony plummeted more than 10%.
In Hong Kong, where financial markets reopened after a public holiday, the benchmark Hang Seng index closed more than 13% lower in its worst single trading day since 1997, according to the index’s list of the biggest historic daily losses. In mainland China, the Shanghai Composite Index closed 7.3% lower. The blue-chip CSI300 index also lost about 7%.
“Washington’s shock decision to impose a 34% tariff on Chinese goods dealt a direct blow to core export sectors like semiconductors and EVs (electric vehicles), triggering a sharp and broad-based repricing across Asian markets,” Dilin Wu, a research strategist at Pepperstone, wrote in a research note.
She described Monday’s spike in Hong Kong trading volumes as “a clear sign of widespread forced liquidations and what can only be described as a full-blown panic in the market.” The worst two-day run for Wall Street stocks in five years is being followed by Asian markets. Following two sessions of sell-offs that erased more than $5.4 trillion in market value, US stock futures fell further on Sunday night.
US stocks fell sharply on Friday after China retaliated fiercely, imposing a 34% tariff on all US goods, raising fears of an escalating and damaging trade war fueled by continuing trade tension between the world’s two largest economies.
In Australia, the benchmark ASX 200 index closed 4.2% down, while New Zealand’s NZX 50 – the first indices to close in the region on Monday – ended the day 3.7% lower. South Korea’s Kospi finished 5.6% lower.The country’s tech powerhouse and major growth driver Samsung tumbled more than 5%.
Even gold is being sold off. Traditionally considered a safer financial bet,gold has dropped by more than 4% to around $3,030 an ounce since Thursday.