The emergency exacerbated the losses of already falling stockmarkets around the world yesterday. The quake struck, and was followed by a tsunami, while Tokyo was still trading. By the close the Nikkei 225 index was down 1.72%. In New York the Dow Jones Industrial Average slid a massive 228 points, a fall of 1.87% to stand at 11,984.61. All three major US indices have fallen below their 50-day moving averages.
The market just needed a catalyst. It was so extended. I think this is the beginning of something severe.' Paul Mendelsohn, the chief investment strategist at Windham Financial Services told Reuters.
Analysts in New York said there was wide-spread de-risking taking place. 'It is another day of reducing risk across portfolios. We have had it one way for too long and with big issues hitting, everyone is running to the exit at the same time, Chris Weston, an institutional dealer at IG Markets told Reuters.
A wave of short-term negatives are hitting markets including fears of unrest in the Middle East spreading to Saudi Arabia, surprisingly strong inflationary figures from China and yesterday's downgrade in Spanish debt. Spain's problems are likely to be played out at volume in coming weeks as European leaders battle to finalise the details of the European Financial Stability Fund.
The Saudi Arabian situation looks to be deteriorating, pushing up brent oil above $115 a barrel. Yesterday there were reports of authorities firing on demonstrators.
These political and economic factors are coming as the market faces a challenging technical environment. The graphs suggest that the current FTSE rout could well continue towards 5,800 where there may be some support. For the latest updates PRESS CTR + D or visit Stock Market news Today
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