The US
president Donald Trump is accusing Democrats of being 'un-American' and
possibly treasonous for failing to applaud him during his State of the Union
speech. Trump says during a speech in Blue Ash, Ohio, that the Democrats last
week gave off 'bad energy' as he delivered his first State of the Union,
failing to clap even at positive economic news.
Stock market
carnage: FTSE and European indexes brace for big falls
Asian
markets plunged overnight following the lead of the Dow Jones which registered
its largest points fall in history
Daniel
Hurst in Tokyo, Phillip Inman in London and Edward Helmore in New York
Tue 6 Feb
2018 06.23 GMT First published on Tue 6 Feb 2018 06.17 GMT
Carnage in
the stock markets. An investor monitors stock prices at a brokerage house in
Beijing as shares tumbled in Asia.
Stock
markets across Europe are bracing themselves for big falls after what was
described as “carnage” in indexes across Asia overnight.
Falls in
Japan and Australia were prompted by a plunging markets in the the US – with
the Dow Jones on Monday experiencing its greatest one-day points fall in
history.
The FTSE
100 was expected to fall about 3.5% on opening. That follows a near 5% drop in
Japan’s benchmark Nikkei 225 index and a 3.3% fall on Australia’s ASX200.
“There’s
genuine carnage out there,” Chris Weston, chief market strategist at IG in
Australia told the Washington Post.
“Everyone
is just running for the hills because nobody actually knows what is causing
this move.”
In Japan,
the Nikkei 225 index declined by as much as 7% during the day’s trade before a
slight recovery to close down 4.7%. The Nikkei’s decline of 1,071.84 points was
its largest point fall since 2016.
Maki
Sawada, from the investment research and investor services department at Nomura
Securities Co, said stocks were being sold in panic after the Wall Street
losses.
“The
sell-off accelerated in a chain reaction,” she told Kyodo News.
Other
markets across Asia also suffered losses. South Korea’s Composite Stock Price
Index fell by about 3% in morning trade. Hong Kong’s Hang Seng index plunged
4.9% while the Shanghai Composite index lost 2.2%.
These
losses followed the 1,175 point dive in the Dow Jones industrial average on
Monday, with investors appearing to react to equity losses and concerns that
central banks will soon increase interest rates to rein in inflation. It
coincided with the arrival of Jerome Powell as the new chair of the US Federal
Reserve.
“This was
volatility unleashed,” said Jack Ablin, chief investment officer at at Cresset
Wealth. “It’s partially fear of interest rates, partially this new Fed chairman
Jerome Powell, partially the market is overvalued relative to fundamentals.”
While
market fear may not be based in any change in economic fundamentals, in its
last meeting under chair Yellen, the Federal Reserve indicated it expects
inflation pressures to increase through the year.
According
to projections released in December, officials expect three rate hikes in 2018
– so long as market conditions remain broadly as they are – but some economists
believe the central bank could add another increase at its final meeting of the
year.
If the
market falls continue they could prove problematic for Donald Trump who has
consistently touted record high stock markets as proof that his presidency is
boosting the economy.
US stocks
have now lost $1tn in value in the first five days of February. However, the
White House, responding to the market drop insisted on Monday night that
long-term economic fundamentals “remain exceptionally strong”.
Vice
President Mike Pence characterised the stock market’s Monday plunge as “simply
the ebb and flow of our stock market”.
In London,
shares in Britain’s top 100 publicly listed companies on Monday suffered their
worst single-day slump since Theresa May called the snap election last April.
The index
of Britain’s top 100 companies stretched its longest losing streak since last
November into a fifth day, following a 1.3% fall. The FTSE 100 index tumbled to
7,345, having peaked at almost 7,800 last month.
“The era of
cheap money is ending, and for markets who got addicted to it, it’s undoubtedly
bad news,” said Hussein Sayed, the chief market strategist at currency dealer
FXTM.
The Reserve
Bank of Australia announced on Tuesday that it would leave interest rates on
hold.
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