Global stock markets tumbled on Monday with some of the biggest sell-offs since Black Monday in 1987.
The Japanese index suffered its worst day in 37 years as fears of a US recession spooked the financial world.
The Topix fell 12.2 per cent and the broader Nikkei 225 index plunged an even bigger 12.4 per cent.
In the US, Apple shares were down 7.1 per cent and Tesla also fell by 8.8 per cent.
Futures on the Vix index, a scale which measures expected turbulence in the US stock market, jumped above 65 points today.
This is the highest level Wall Street’s ‘fear gauge’ has been at since the beginning of the Coronavirus pandemic.
Futures on the Vix index, a scale which measures expected turbulence in the US stock market, jumped above 65 points today
The benchmark Nikkei 225 index suffered its largest points drop in history, plunging 12.40%, or 4,451.28 points, to 31,458.42 as the broader Topix index lost 12.23%, or 310.45 points, to 2,227.15
The falls on the stock market today come despite markets rising for most of the year.
Instead, the drops are amid fears the Federal Reserve is not responding fast enough to signs the US economy is weakening.
To further the pressure on markets, Warren Buffett’s Berkshire Hathaway said on Saturday it had sold $76bn of its stocks in Apple.
The company cut its position in iPhone maker Apple in the second quarter by half, according to filings published at the weekend.
It comes as drops were also seen in South Korea, Australia and India today with the European benchmark Stoxx Europe 600 shedding 2.7 per cent.
The Kospi benchmark (South Korea) fell 8.8 per cent, the Australian S&P/ASX dropped 2.5 per cent and India’s Sensex benchmark shed 2.7 per cent.
Elsewhere in Asia, Hong Kong’s Hang Seng index lost 2.5 per cent to 16,519.78.
Taiwan’s Taiex also crumbled, losing 8.4 per cent as Taiwan Semiconductor Manufacturing Co, the world’s biggest chip maker, dropped 9.8 per cent.
Semiconductor shares plunged with Tokyo Electron nosediving 18.48 per cent to 22,055 yen and Advantest tumbling 15.84 per cent to 5,313 yen.
Toyota plummeted 13.65 per cent to 2,232 yen.
In Tokyo, Japanese Finance Minister Shunichi Suzuki declared today the government was cooperating with the central bank and closely monitoring markets with a sense of urgency.
‘It’s hard to say what is behind the decline in stocks,’ Suzuki told reporters, adding that authorities were watching stock market moves with ‘grave concern’.
A man is reflected on an electric stock quotation board outside a brokerage in Tokyo
In an attempt to calm volatility in the market, futures trading was suspended for 10 minutes as a so-called ‘circuit-breaker’ on the Nikkei and Topix indexes on the Osaka Exchange in Japan’s western metropolis, an exchange official said.
The Bank of Japan last week raised interest rates for the second time in 17 years, with talk of another rate hike to come, while the US Federal Reserve has hinted at a cut as soon as September.
Daiwa Securities said the losses in Tokyo reflected ‘deepening concerns over the uncertain US economy’.
‘Investor sentiment was down as the US employment data for July came in lower than expected, raising fears that the US economy is slowing more than expected,’ IwaiCosmo Securities said.
‘The market was also weighed down by the yen’s appreciation against the dollar and as expectations for exporters’ upbeat financial results receded,’ the brokerage added.
‘The rapid move in the yen is putting downward pressure on Japanese equities, but it’s also driving an unwind of a major carry trade – investors had leveraged up by borrowing in yen to buy other assets, chiefly US tech stocks,’ said Kyle Rodda, a senior financial market analyst at Capital.com in Melbourne.
‘We are basically seeing a mass deleveraging as investors sell assets to fund their losses.’
