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HONG KONG – Global markets were shaken Thursday by the fall in US stocks, worried about rising interest rates and rising tensions between Beijing and Washington.
Equities were particularly hard hit in Asia, where no market was spared by massive sales. In Shanghai, Tokyo, Seoul and Hong Kong, stocks fell 4% or more during a very painful morning trading session.
In Europe, the first transactions showed that the main stock indexes were about 1.5% lower.
Futures markets following the expected performance of US stocks have suggested that the sale could continue.
The stock trade began Wednesday in New York, when the Standard & Poor's 500 index fell 3.3%, its largest decline in eight months. It was the fifth day of the sale, marking a change of mood on Wall Street, which had flourished despite strong corporate earnings.
But concerns have begun to weigh. With signs of rising inflation, the Federal Reserve is expected to further raise its interest rates, which could increase the cost of borrowing in the United States and around the world.
Market damage has been particularly severe in China, where signs of economic weakness and worries about the impact of President Trump's trade war have dragged down stocks for months. During the weekend, the People's Bank of China has injected $ 175 billion into the economy to support it. Concerned about the impact of negative information on its citizens, China has censored the negative economic news.
Tensions with Washington seem to be worsening. On Wednesday, US officials said they had indicted a Chinese intelligence official after his extradition from Belgium. Washington officials also announced on Wednesday that they would be looking more aggressively at foreign investors in the United States, targeting mainly China.
Chinese technology stocks suffered the biggest losses. The country's largest and best-known companies, including internet giant Tencent, telecom company ZTE, and internet service platform Meituan Dianping, have seen a drop of more than 7 percent.
In Shanghai, where the market was already in bearish territory, stocks fell by 4.3% and are around their lowest level since November 2014. Some market observers have wondered whether the government could intervene to stem the losses The defeat of the summer stock market triggered a massive selloff.
At that time, it prohibited short selling, suspended IPOs and prohibited investors with more than 5% of a security from selling it. Officials also deployed a "national team" of state-owned financial institutions to buy stocks and help strengthen the market, which fell by more than 25 percent.
In other Asian capitals, the sale seemed endless. In Tokyo, equities fell by 4%, while investors in Seoul pushed the market down by 3.6%. In Hong Kong, where many Chinese companies are listed, the market was down 3.8%. Taiwan was the most affected country, where the market plunged 6.2% in morning trading.
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