Stock market crash february 2016
Investors buy gold and government bonds and sell shares in banks and companies exposed to lower commodity prices. Larry Elliott and Jill Treanor. Thursday 11 February Panicked investors sought refuge in the safe havens of gold and government bonds on Thursday as a fresh spasm of global selling sent share prices crashing in Asia, Europe and North America. The Dow Jones Industrial Average fell points, or 1.
All three had bounced back late in the day from sharper falls but, again, financial stocks were big losers. Until this week, investors had assumed that the US central bank would raise borrowing costs steadily this year after moving for the first time in almost a decade in December. The International Monetary Fund said it was concerned about the recent sharp declines in the share prices of European banks, because a healthy banking sector was needed to underpin economic growth.
The interest rate — or yield — on a year UK government gilt declined to below 1.
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Investors fear that although banks have bolstered their capital positions since the last crisis, they will start to report losses on non-performing loans to energy and property companies affected by faltering growth, while their profitability will also be hit by negative interest rates. HSBC shares closed at their lowest level since the spring of , when the global recession bottomed out.
Stocks dive to lowest level in nearly 2 years as oil crashes - Feb. 11,
Asia set the tone for trading early in the day. Steen Jakobsen, chief economist at Saxo Bank, said: The scale of the problems have left investors groping for reasons for the loss of confidence that has plagued the markets since the start of , giving them the worst start to the year on record. While some have blamed fears of sluggish economic growth and worries about the impact of prolonged low interest rates on banks and other sectors, some investors are looking at other factors.
Saker Nusseibeh, chief executive of Hermes Investment Management, said: The use of financial instruments that track markets, such as exchange traded funds and commodity trading advisors, was part of the reason for the phenomenon, he said.
They are turning stock markets into casinos. Economists warned that the falls in stock markets could indicate a downturn for economies. They said they did not expect the eurozone to contract this year but warned: Please choose your username under which you would like all your comments to show up. You can only set your username once.
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