Market Update: Global Markets Got Severely Impacted, Raising Concerns And Outflows

  • Oct 11, 2018 AEDT
  • Team Kalkine
Market Update: Global Markets Got Severely Impacted, Raising Concerns And Outflows

US Markets Meltdown, Indices Fell Significantly

As the sell-off has been witnessed in the markets globally, the US indices have also joined the group. On October 10, 2018, major indices tumbled with Nasdaq Composite ending the trading session lower at $7,422.05, representing the decline of 315.97 points or 4.08%. The primary factors which were responsible for the strong sell-off in the US stocks were the decline in the technology stocks. The Trump administration has been continuously throwing up cards which are making the global markets tumble. The investment in the US companies by the foreign ones would now be exposed to further restrictions.

As per the US Treasury, the federal panel would now have the authority to review the investment in the US companies which are beyond controlling stakes as well as takeovers. This means that any investments from the foreign companies which would entitle that company to have access to nonpublic technical information, place in the decision-making process as well as on the board would also be covered by the federal panel.

The expansion would include the number of industries like computers, telecommunications as well as semiconductors. This recent step by the Trump administration can be considered to punish China in regard to the trade practices. The administration is in the process of restricting China from getting access to technologies like 5G. It seems like the market participants need to get habitual of these types of news as the trade wars between the US and China won’t be coming to an end in the near term.

With Global Sell-offs, Australian Markets Are No Exception

The markets globally have been witnessing a strong downturn and it is taking the Australian markets along with it. S&P/ASX200 ended the session lower at $5883.8 which implies the fall of 166 points or 2.8%. The primary reasons for the wipeout are global outflows from the markets, higher yields on the bonds as well as increasing tensions between the US and China. The International Monetary Fund has already warned that the escalation would be impacting the Australian economy as well.

Despite the decline in the Index, Evolution Mining Limited (ASX: EVN) and St Barbara Limited (ASX: SBM) managed to witness an upward momentum as they ended the day by gaining 6.273% and 6.268%, respectively. However, Afterpay Touch Group Limited (ASX: APT) and Wisetech Global Limited (ASX: WTC) ended the day lower by witnessing the fall of 11.054% and 10.463%, respectively. Apart from them, Pendal Group Limited (ASX: PDL) also fell by 3.129% even though its FUM for the September quarter recorded an increase of $1.6 billion on the sequential basis. For more information click here.

Fortescue Metals Group (ASX: FMG) has made an announcement regarding its buy-back plan for an amount of up to $500 million. The stock ended the session on the positive note as it has advanced 2.452%. For more information click here.

What’s Going on In European Markets?

The European markets have also witnessed significant fall feeling the global pressures in the equity markets. The primary sectors which witnessed the strong downtrend were basic resources as well as technology. However, most of the sectors witnessed the negative impacts primarily because of the rising tensions between the US and China raising concerns over economic growth. However, increased rates on the debt products were also the primary contributor. The strong downtrend in the luxury stocks also impacted the European markets.

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