Utter carnage on global markets – but these South African shares are rallying

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Stock markets around the world were taking a hammering Thursday as rising fears about global economic growth and ongoing trade tensions continued to rattle investor confidence. US stocks saw their second consecutive day of losses, with the S&P 500 and Dow Jones both down more than 1% in morning trade.

Concerns in Asia are exacerbated by investor doubts that fresh stimulus from China’s central bank will help prevent US President Trump’s trade war from triggering an economic slowdown. Warnings about global growth from the International Monetary Fund contributed to the concerns, as did rising interest rates. Trump on Wednesday weighed in on the sell-off by blaming the Federal Reserve, calling the US central bank’s interest-rate policy “crazy.”

“Some market pundits claim there is no real ‘new news’, but in our view, we have reached a critical mass on negative news, which has triggered this sell-off,” Witold Bahrke, senior macro strategist at Nordea Asset Management said in an email.

Here’s how markets looked at the European close:

  • US MARKETS: Stock indexes were all trading down, with both the S&P 500 and Dow Jones more than 1% lower
  • THE VIX: The Cboe Volatility Index, or VIX, commonly known as “the fear index,” is spiking.
  • CHINA: The Shanghai Composite was down 5.2%.
  • EUROPE: Asia’s bloodbath session has also entrenched itself in Europe, with virtually all major European indexes losing more than 1% of their value. Italy’s FTSE MIB index entered a bear market (a 20% decline within a two-month period), down 1.76% at 19,371.
  • UK: Britain’s blue-chip FTSE 100, for example, lost 1.94% to trade at 7,007 points.
  • BITCOIN: Cryptocurrencies weren’t spared either. All major crypto assets are down Thursday, with the likes of Ethereum and bitcoin cash losing more than 10% of their value.

China’s most significant mainland index, the Shanghai Composite, dropped more than 5% during Thursday’s trading session, the second time in just four days it had lost 4% or more of its value. Elsewhere in Asia, Hong Kong’s Hang Seng lost 3.3%, while Japan’s benchmark Nikkei 225 was down just shy of 4%.

Those moves followed a bloodbath in the US. On Wednesday, the Dow Jones industrial average lost more than 800 points during the session, its third-biggest single-day point fall in history. Things spread to Asia overnight, with all major indexes on the continent witnessing major drops.

“A crazy day in the markets yesterday looks set to continue with further selling expected in equities today,” Neil Wilson, the chief analyst at Markets.com, said in an email Thursday morning. “Clearly we’ve entered a severe bout of selling that may well have further to go.”