AFP, London :
Panic gripped trading floors across the world on Tuesday, with Asia and Europe plunging after record-breaking losses on Wall Street, as investors fretted over the prospect of rising US interest rates and took profits following months of markets euphoria.
The selloff began last Friday when bright US non-farm payrolls data sparked fears that inflation will surge this year-and that the Federal Reserve will be forced to raise borrowing costs more quickly than anticipated.
In initial trade on Tuesday, European stock markets collapsed by about 3.5 percent, mirroring dramatic falls across Asia.
“It’s not doom and gloom, and it’s not financial markets Armageddon; it’s just a much needed and much overdue correction,” AxiTrader analyst James Hughes told AFP.
“There are four stages of a fall: hope, greed, panic and fear. We are not at fear, but we are at panic at the moment-which is only natural after a 1,175-point fall.”
New York’s Dow Jones Industrial Average saw its steepest ever one-day point drop on Monday, shedding a total of 1,175.20 points or a hefty 4.6 percent in value.
And 10-year US Treasury yields are still hovering at four-year peaks.
European markets later trimmed their gains somewhat on Tuesday to stand about 2.5 percent lower compared with Monday’s closing level.
“Markets usually grind to the upside, but fall like a rock,” said analyst Naeem Aslam at trading firm ThinkMarkets.
“Traders have been looking at the market for the past year moving in one direction which was skewed to the upside. Now, it’s time for the bears to take their revenge.”
Panic gripped trading floors across the world on Tuesday, with Asia and Europe plunging after record-breaking losses on Wall Street, as investors fretted over the prospect of rising US interest rates and took profits following months of markets euphoria.
The selloff began last Friday when bright US non-farm payrolls data sparked fears that inflation will surge this year-and that the Federal Reserve will be forced to raise borrowing costs more quickly than anticipated.
In initial trade on Tuesday, European stock markets collapsed by about 3.5 percent, mirroring dramatic falls across Asia.
“It’s not doom and gloom, and it’s not financial markets Armageddon; it’s just a much needed and much overdue correction,” AxiTrader analyst James Hughes told AFP.
“There are four stages of a fall: hope, greed, panic and fear. We are not at fear, but we are at panic at the moment-which is only natural after a 1,175-point fall.”
New York’s Dow Jones Industrial Average saw its steepest ever one-day point drop on Monday, shedding a total of 1,175.20 points or a hefty 4.6 percent in value.
And 10-year US Treasury yields are still hovering at four-year peaks.
European markets later trimmed their gains somewhat on Tuesday to stand about 2.5 percent lower compared with Monday’s closing level.
“Markets usually grind to the upside, but fall like a rock,” said analyst Naeem Aslam at trading firm ThinkMarkets.
“Traders have been looking at the market for the past year moving in one direction which was skewed to the upside. Now, it’s time for the bears to take their revenge.”
