Our Sites:
Bear market trends
The development has seen bear market conditions emerge as the FTSE 100 index fell 5.5% to 5,578.2 and indexes in Paris and Frankfurt also dropped about 7%. (A bear market is a market trend accompanied by widespread pessimism. It most famously occurred during the Great Depression, from 1930 to 1932). Although Wall Street was closed on Monday, 21 January (for Martin Luther King Jr. Day), the US stock market followed suit almost immediately as the market continued its steep decline.
Global market crisis: Nikkei and local market figures
Stock markets all across Asia have been affected by the global trend, with Japanese shares tumbling 4.5 per cent as growing fears of a recession in the US hit the Nikkei. In the Australian market, BHP Billiton headed up the market freefall, losing $2.04 (6.1 per cent) in early trading, to $31.25, whilst Macquarie Group in the financial stocks were down $4.75 (7.24 per cent) to $60.95. Commonwealth Bank dropped as much as $2.38 (4.7 per cent), to $48.50, whilst the National Australian Bank tumbled to $34.20. Westpac also suffered losses, down 48 cents to $25.29, with ANZ also dropping 61 cents to $25.59. Wesfarmers dropped 90 cents, to $33.60, in the retail sector, and even Woolworths plunged 12 cents, to $30.91. David Jones also suffered, dropping 18 cents to $4.57.
Energy stocks weren't safe from the market freefall either, with Woodside Petroleum down $2.69 to $42.88, Woodside Petroleum dropping $2.69 to $42.88, and Santos dropping 63 cents to $11.99. The Australian dollar lost over 1.5 US cents overnight also, tumbling to 85.80 US cents and hitting a five-month low against the yen.
As the market fell 3 per cent in the first few minutes of trade alone on 22 January, Austock Securities strategist Michael Heffernan described the scene as "blood on the floor''. With the market freefall proving to be one of the steepest declines in years, you may be concerned about how this dramatic change affects your investment. Contact your financial advisor without hesitation to be sure of taking the best possible action in difficult market times.
