MercoPress. South Atlantic News Agency

Global markets volatility persists: investors dump stocks

The global stock market slump has entered its second week with stocks plunging in Wall Street, Asia, Europe and Latinamerica. Although the key US Dow Jones index remained positive for most of Monday, towards the end of the session it closed down 63.7 points, or 0.5%, at 12,050.4.

Elsewhere on Wall Street, the technology-laden Nasdaq index closed down 1.1% at 2,340.7, while the S&P 500 index closed down 0.9% at 1,374.12. The drop mirrored heavy losses in Europe, Asia and Latinamerica, with investors dumping stocks because of concerns they are overvalued and global growth, particularly in China and United States will slow. And as investors become increasingly nervous, the stock exchanges plunge have started to ripple through to the commodities markets, especially oil. US sweet crude was down by 1.38 a barrel to 60.26 US dollars, while Brent crude dropped 1.37 to 60.71 on the ICE Futures exchange in London. The current stock slump was triggered last week by the biggest drop on China's market in a decade followed by fears about the state of the US economy and its growth potential. Investors are questioning whether share prices had risen too far too quickly since many of the world's top indexes and shares had climbed to levels not seen since the dotcom bubble burst in 2000. On Monday, Japan's Nikkei 225 had its worst day since June, loosing 3.4%, largely a result of the continued rise in the yen - which hit its highest rate against the dollar in three months. A strong currency makes Japanese goods more expensive abroad and cuts the profits of Japanese firms when overseas earnings are brought home. It also means that investors who borrowed yen to take advantage of low interest rates and then put the cash into assets such as equities, would now be looking to close positions and pay off their loans, analysts said. Shanghai's composite index lost 3.5%, Taiwan shares closed down 3.7%, and the main Indian market had its lowest close in five months. Hong Kong collapsed 4%, Australia 2.3% for the fifth day. South Korea was down 2.7%; Philippines 4.5% and India 4% In Europe, France's Cac and Germany's Dax indexes also slipped, both losing more than 0.7% and 1% respectively. In London the FTSE 100 closed down 57.5 points, or 0.9%, at 6,058.7. In the past five sessions, about £111bn has been wiped off the FTSE's value. In Latinamerica Sao Paulo's Bovespa was down 2.8% with an accumulated loss of 10% in the last week. Chile's IPSA slumped 1.07% and Argentina's Merval 2.67%. Mexico was also down 2.02%.