Black Monday in global financial markets.
On Monday, the Japanese stock market experienced its largest decline in recent years, with the magnitude of the decline even disrupting global stock markets, with many global stock markets experiencing rare declines in recent years.
Multiple circuit breakers, causing a sharp drop in the entire Asia Pacific market
The Japanese stock market and index futures tracking the Japanese stock market experienced the most severe decline in recent years today. The Nikkei 225 index futures and the CSI index futures both triggered circuit breakers multiple times during trading and temporarily suspended trading.
Specifically, the Nikkei 225 index plummeted more than 13% during trading and closed down 4451.28 points, a decrease of 12.4%, at 31458.42 points, marking the largest single day decline in 34 years.
The Japan Eastern Stock Exchange index also plummeted by over 12%.
In addition, the Japan Stock Exchange Group issued a rare announcement today stating that based on today's trading conditions and other factors, it has decided to expand the price range for trading Zaraba DCB Index options.
The overall performance of the Japanese stock market has been good in recent years. The last time the Nikkei 225 index closed down more than 8% was on March 15, 2011, when the Nikkei 225 index plummeted 10.55%. At that time, shortly after the Fukushima nuclear accident in Japan, the market suddenly spread panic, and the stock market experienced a sharp decline. On March 14, 2011, the Nikkei 225 index plummeted 6.18%, and the following trading day, it further plummeted 10.55%.
Going forward, the trading days when the Japanese stock market fell more than 8% can be traced back to the global financial crisis in 2008, when there were also several occasions where the Nikkei 225 index fell more than 8%.
In addition to the sharp decline in the stock market, the volatility of the Nikkei 225 index has also surged significantly, with a 140% increase so far, the largest single day increase in history.
As the Japanese stock market fell, other markets in the Asia Pacific region also experienced severe declines. The Korean Composite Index fell more than 10% during the trading session, triggering a circuit breaker. The Korean KOSDAQ index fell more than 13% during the trading session, triggering a circuit breaker.
The Singapore Straits Index fell by around 5% during trading.
Taiwan, China's stock market also fell sharply, with the Taiwan Weighted Index falling more than 8%.
Affected by the external stock market, the A-share and Hong Kong stock markets, which had previously performed strongly in the morning, also fell in the afternoon. As of the close, the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index have all fallen by over 1%.
Multiple cross-border ETFs and LOFs significantly expanded their declines in the afternoon. Nikkei 225 ETF (513880), S&P Information Technology LOF (161128), and Nasdaq Technology ETF (159509) closed at the limit down in the afternoon session.
In terms of Hong Kong stocks, the Hang Seng Index and Hang Seng Technology Index have both fallen by over 2%.
Panic index surges, cryptocurrency plummets
Although the US stock market has not yet opened, several major index futures have expanded their declines this afternoon. As of press time, Dow Jones futures have fallen more than 1%, S&P 500 futures have fallen 2.79%, and Nasdaq 100 futures have fallen more than 5%.
In addition, the S&P 500VIX index futures, also known as the "panic index," surged sharply, rising over 66% at one point.
In terms of European stocks, current major index futures have fallen by over 2%.
In addition, the cryptocurrency market has also plummeted, with Bitcoin falling below the $49000 mark at one point. Data shows that the total market value of the cryptocurrency market once fell below $1.9 trillion. In the past 24 hours, more than 270000 people have liquidated their positions in the entire market, with a total liquidation amount exceeding $1 billion.
Why did the market plummet?
Market analysts believe that the global financial market's shock in the past two trading days may be related to the following factors:
1. The US non farm payroll data fell short of expectations, triggering market concerns about a "hard landing" for the US economy. On August 2nd local time, the US Bureau of Labor Statistics released data showing that non farm employment increased by 114000 in July, up from 206000 previously; The unemployment rate rebounded to 4.3%, up from the previous value of 4.1%.
Buffett significantly reduced his holdings of apples. According to news over the weekend, Berkshire Hathaway, a subsidiary of Warren Buffett, significantly reduced its holdings of Apple Inc. from 789 million shares in the first quarter to about 400 million shares in the second quarter, with a stock market value of approximately $84.2 billion, a significant decrease from $174.3 billion at the end of the first quarter. In addition, Buffett has recently sold a large amount of his "second position" at Bank of America. The latest document released by Berkshire Hathaway shows that the company has been selling Bank of America stocks for 12 consecutive days. Between July 30th and August 1st, Berkshire Hathaway cashed out $779 million by selling 19.22 million shares of Bank of America stock.
3. Geopolitical risks. The tense situation in the Middle East, especially the potential conflict between Iran and Israel, has increased uncertainty in the global market and put pressure on financial markets.