online desk | 06 February 2018 | 3:15 pm
Asian markets plunged on Tuesday as investors dumped stocks following heavy falls in the US in anticipation of higher interest rates.
Japan’s Nikkei 225 index suffered its biggest one-day point drop since 1990, before recovering.
It comes after the Dow Jones Industrial Average suffered its worst drop in more than six years on Monday.
A strengthening global economy and healthy corporate earnings had spurred world markets to record highs.
But the sell-off began last week after a solid US jobs report fuelled expectations that the Federal Reserve will raise interest rates faster than expected.
“Economic news from the US has been stronger than anticipated,” said David Kuo, chief executive of financial services advisory Motley Fool.
“So, perversely, the market correction has been caused by positive economic news.”
Markets in Asia typically follow the lead from the US.
Elsewhere in the region, Japan’s Nikkei 225 index closed down 4.7%, while Hong Kong’s Hang Seng dropped 4.5% and South Korea’s Kospi index gave up 2.6%. Australia’s benchmark S&P/ASX 200 lost 3.2%.
US stock futures were pointing to more sharp falls when markets open on Tuesday.