‘Panic selling’: Global angst snowballs as Japan enters bear market

Japan’s benchmark Nikkei 225 Stock Average tumbled 5 per cent into a bear market on Christmas Day as the global equity rout continued unabated in the last week of the year, with renewed turmoil in Washington rattling investors.

Tuesday’s selloff took its cue from the S&P 500’s worst-ever trading session before the Christmas holiday. Shares in China, the other major Asian market open on Tuesday, also declined as investors shrugged off a pledge by the government to do more to support companies.

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Investors got mixed signals from Washington heading into the resumption of US stock futures trading at 6 pm New York time. President Donald Trump said a partial US government shutdown will continue until funding for a US-Mexico border wall is secure.

He expressed confidence in his Treasury secretary and the Federal Reserve even as he again criticised the central bank for raising rates too quickly.

“The Trump bubble, which has brought gains in US stocks and the dollar, is collapsing,” said Mitsushige Akino, an executive officer at Ichiyoshi Asset Management in Tokyo.

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“The more stocks fall, the more investor sentiment gets worse, so there’s more people who need to sell temporarily, such as stop-loss selling.”

The tumult in Washington added to the troubles of investors, who have seen equities worldwide tumble on concerns about a slowing US economy, the pace of the Fed’s rate hikes and the ongoing trade war.

]The S&P 500 plunged almost 3 per cent to end at a 20-month low on Monday.



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