Stock Sell-Off Rolls On; U.S. Futures Pare Decline

Asian Stock Markets

Asian stocks plunged for a second day as investors continued to flee riskier assets, though U.S. equity futures attempted a comeback as European trading began.

The Nikkei 225 Stock Average closed off its intraday lows, still weak enough to record a drop of more than 10 percent from a high on Jan. 23. 

Stocks across the region extended a global slump with virtually all shares on the 1,000-plus member MSCI Asia Pacific Index down. Euro Stoxx 50 futures fell more than 3 percent. The yen was flat after advancing earlier on haven demand. Treasuries declined after they also benefited from a flight to safety earlier.

Elsewhere, oil slumped for a third day and metals joined the sell-off after gaining on Monday. Bitcoin tumbled for a sixth day to trade around $6,000.

Many finance professionals were left scratching their heads to explain the severity of the moves in a short space of time. Anxiety was building about the outlook for monetary policy prior to Monday’s rout, with equities being tested by the surge in bond yields. Global shares had just last month risen to record highs on optimism for expanding profits and economic growth.

Even as the Dow suffered its worst point loss ever, some of the biggest investors remained relatively sanguine.

Euro Stoxx 50 futures fell 3.2 percent in early European trading. Futures on the S&P 500 Index declined 0.1 percent after falling as much as 3 percent. The underlying gauge tumbled 4.1 percent Monday.

Japan’s Topix index plunged 4.4 percent at the close in Tokyo, its biggest drop since November 2016, and the Nikkei 225 dropped 4.7 percent, paring a slump of as much as 7.1 percent.

Hong Kong’s Hang Seng Index declined 4.6 percent and the Shanghai Composite Index fell 3.4 percent.

South Korea’s Kospi index lost 1.5 percent.

The MSCI Asia Pacific Index plunged 3.4 percent, set for its biggest drop since June 2016, when stocks were hit by the Brexit vote.

Currencies

The Bloomberg Dollar Spot Index gained less than 0.1 percent.

The yen was flat at 109.09 per dollar after rising 1 percent on Monday.

The euro rose 0.2 percent to $1.2397.

The pound was steady at $1.3966.

Bonds

The yield on 10-year Treasuries rose about four basis points to 2.74 percent after plunging more than 13 basis points Monday.

German 10-year bund yields fell about three basis points to 0.71 percent.

Commodities

West Texas Intermediate crude was down 0.9 percent to $63.56 a barrel.

Gold rose 0.2 percent to $1,342.79 an ounce.