The global stock sell-off is continuing, with Tuesday seeing significant falls at exchanges in Asia and Europe.
The day after the U.S. stock market fell by its largest amount in six years, Japan’s Nikkei index was down by 6.5% and Hong Kong’s Hang Seng was down more than 6%.
When European bourses opened, they also fell. London’s FTSE 100 index was down 3.5%, and a similar drop was evident on Germany’s DAX. The Stoxx 600 index, which tracks the largest European companies, was down more than 3%.
However, at the time of writing (around 4.30 a.m. ET) there had been some signs of a recovery, with the FTSE 100 only down 1.6% on the day so far, the DAX down 1.9%, and the Stoxx 600 down 1.6%.
The slide is widely seen as the result of traders worrying about future interest rate rises. U.S. jobs data lit the fire at the end of last week, with higher-than-expected wage increases prompting inflationary concerns.
All this comes after a year in which global stock markets gained 22%.
“Markets are coming to the conclusion that the U.S. economy is close to overheating and therefore that the risks of inflation are bigger than the risks of a recession,” Deutsche Bank economist Torsten Slok said, quoted by the Financial Times.