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Global stock sell off slows in Europe

Global stock sell off slows in Europe

LONDON: Global equity markets appeared set to end a tumultuous week on a volatile note with European markets bouncing off new lows in early trading after sharp losses in Asia highlighted investor fears that a decade-long bull market was nearing an end.

The sell off in Asia capped one of the worst weeks in Hong Kong and Tokyo in recent history, with the Hang Seng closing on Friday with a 9.5 per cent drop for the week, its worst weekly performance in almost a decade. Japan’s Topix finished the week down 7 per cent, its biggest weekly drop in two years. London’s FTSE 100 was 0.5 per cent lower in morning trading while Frankfurt’s Xetra Dax 30 traded down 0.4 per cent. The Europe-wide Euro Stoxx 600 was 0.5 per cent weaker. The turbulence in Asia and Europe followed Wall Street’s steep losses on Thursday, where a 3.8 per cent drop in the S&P 500 index pushed the benchmark index to a 10 per cent decline from its January high — the typical definition of a correction. Much of the blame for the selling has fallen on a handful of complex exchange-traded notes and algorithmic trading strategies. Analysts at Barclays, Bank of America and JPMorgan estimate that volatility-targeting traders will sell roughly $200bn of equities this week, leading to more pressures on markets.