Financial markets: Asian stock markets regain strength after plunging into Wall Street

SINGAPORE – The stock market meltdown that began on Wall Street went through Asia on Thursday, bringing China's benchmark to its lowest level in four years and plunging indices into Japan, Korea and Australia.

Japan's benchmark fell from an unusually wide margin of 3.9% and the main Chinese index of 5.6%. Markets in Southeast Asia recorded similar declines.

Investors are wary of possible interest rate hikes in the United States. This will increase the cost of corporate borrowing and may hinder economic growth.

The US Federal Reserve recently raised its short-term interest rates for the third time this year, with another expected before the end of the year. Strong economic data and the positive outlook of Fed officials led to a sell-off of US Treasury bonds, especially long-term bonds, raising concerns about even higher interest rates.

On Wednesday, President Donald Trump said the Fed "was making a mistake" with its rate hike campaign. "I think the Fed has gone crazy," he said.

Stephen Innes of OANDA said that Trump's comments have disrupted traders and put pressure on the dollar. "Stock markets have been pulverized today, with investors remaining in full retreat and even the most pessimistic equity markets are still shocked at the magnitude of this movement," Innes said.

"This merger is not just a mild case of sniffles, suggesting that the last sneeze of the US stock market could turn into a pandemic global market," he added.

The sentiment has also been weakened by the growing struggle between the US tariff and the Chinese tariff on technology policy in Beijing. US officials have accused China of interfering in mid-term elections and stealing trade secrets from its businesses through spies.

The International Monetary Fund reduced its global growth outlook this week by citing interest rates and trade tensions.

The Nikkei 225 of Tokyo sold 3.9% to 22,590.86 and the Shanghai Composite lost 5.6% to 2,573.11. The Hang Seng Hong Kong index fell 3.8% to 25,192.26. Kospi in South Korea fell 4% to 2,139.51. The Australian S & P / ASX 200 slid 2.7% to 5,883.80. Inventories plunged in Taiwan and plummeted across Southeast Asia.

US stocks fell on Wednesday because of worries over rising interest rates and trade tensions that led to a sell-off in technology and internet stocks. The Dow Jones Industrial Average had its worst loss in eight months, down 3.1% to 25,598.74.

The S & P 500 index fell 3.3% to 2,785.68. The Nasdaq composite, which includes a large number of technology stocks, was 4.1% lower at 7,422.05. It dropped 7.5% in just five days. The Russell 2000 Small Business Equity Index fell 2.9% to 1,575.41.

Apple and Amazon, the two largest companies in the S & P 500, have each had their worst day in two and a half years. Apple lost 4.6% while Amazon lost 6.2%.

Amazon has climbed 50% this year, but its stock has dropped 14% from its record in early September.

Francis Tan, investment strategist at UOB Private Bank, believes markets will recover in the United States. "The valuation of US stocks, especially technology stocks, is still quite high and there may be for-profit shares now," said Tan

The dollar fell to 112.24 yen against 112.27 yen on Wednesday night. The euro rose from 1.1523 dollar to 1.1547 dollar.

Oil futures have fallen. US crude yielded 96 cents to 72.21 dollars a barrel. The contract is set at $ 73.17 in New York. Brent Brut, the international standard, dropped from 1.18 USD to 81.91 USD per barrel.