Asian stocks plunge after bloodbath on Wall Street

Most Asian markets tumbled Monday after USA stocks were pummelled at the end of last week, with traders fretting that a surging U.S. economy will lead to sharp interest rate rises by the Federal Reserve. On Tuesday, the Nikkei index fell 4.73 percent, marking its steepest fall since June 2016. In late trade in Hong Kong, the Hang Seng index was down 4.35% at 30,815. The investors were betting on the U.S. economy due to strong expansion improving corporate earnings and stable inflation, but the trend seems to be changed.

As the dust settles following the rout that erased $1 trillion from the value of United States stocks, Goldman Sachs Group Inc.'s chief strategist says there's only one thing to do: Buy.

Tokyo stocks opened higher on Thursday, after United States stocks finished lower amid nagging questions about two days of wild price swings.

"That is not to say that we won't see further falls in coming days, but in an environment where growth is good and earnings are expected to rise globally, there are decent underpinnings", said James Knightley, chief global economist at ING.

The pivotal gauge of S&P 500 volatility, the VIX, did come off nearly 20 points overnight but was still relatively elevated at 29.98 per cent.

Two days of steep losses have erased the United States market's gains from the start of this year, ending a spate of record-setting calm for stocks.

Yoshinori Shigemi, market strategist at JPMorgan Asset Management, said the spectre of inflation will gradually undermine the attraction of equities even though the markets could rebound in the short-term.

Though many stock indexes are close to where they started the year, the losses mark a reversal of fortune following a sustained period of gains, a pullback that some market pros have been predicting for some time.

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The slide Monday brought the Dow back below 24,000 points.

The turmoil in global stock markets has echoes with what's been going on with bitcoin, the hugely volatile virtual currency, which rose exponentially to around $20,000 a year ago before a precipitous slump.

Analyst George Magnus has a worrying take on the market slump, blaming the US Government's budget deficit. Investors remain optimistic on economic recovery.

The US economy is growing, and that means inflation expectations - how much things will cost in the future - are going up. Taipei surged 2.5% and Manila was 1% higher. Toyota Motor rose on an upgrade of its financial performance for the current fiscal year, while buyers also grabbed shares in Shin-Etsu Chemical, silicon wafer maker Sumco and machinery maker Komatsu.

Investors were disappointed at the market's failure to rise further amid the emergence of selling on a rally, market sources said, adding stocks bowed to futures-led selling in the afternoon. The Hang Seng China Enterprises Index now is roughly equal to our index target.

Wall Street's so-called fear gauge - known as the VIX index - shot up to its highest level since the summer of 2015, when a market sell-off in China prompted a global sell-off in markets.

"We're just not used to it because it's been so long since we've had a significant correction". "No volatility is not something to expect. We have a number of Fed speeches this week and guidance or lack thereof could impact markets". "I think the fundamentals are quite strong". "It was how quickly they corrected that was interesting".


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