Hong Kong investors brace for possible wild ride as wave of global trading gets ready to resume
- Drama out of the White House and Federal Reserve has rattled global markets
- Nasdaq and Japan’s Nikkei are in bear markets, while S&P 500 is teetering on joining the bears
Hong Kong traders are bracing themselves for what could be a wild session when trading resumes Thursday, following days of drama building out of the US that sparked a bloodbath on Wall Street and in Tokyo.
The Hong Kong market has been closed since Monday noon for the Christmas holiday, when it ended slightly down. When US markets opened on Monday US time, the S&P 500 Index plunged 2.7 per cent to close on the brink of entering a bear market – the market’s worst Christmas Eve trading day in history.
US traders fled as President Donald Trump ratcheted up his criticism of US Federal Reserve Chairman Jerome Powell for raising interest rates too fast and tweeted that the Fed is “the only problem” in the US economy. Meanwhile, media reports suggested that a furious Trump had discussed firing Powell, his nominee for the position.
In addition, US Treasury Secretary Steven Mnuchin’s attempt to raise confidence in tumultuous markets by calling the heads of the six largest US banks over the weekend spooked investors. A partial shutdown of the US government triggered by a stand-off between Trump and Congress over funding for a border wall added more gloom to the markets.
The combination led to a sell-off across global markets, with pauses in some markets on Monday midday and Tuesday due to the Christmas holiday.
Japan’s benchmark Nikkei 225 Index plummeted by 5 per cent into bear market territory on Tuesday. On Wednesday, however, it overcame a slump to close up by 0.9 per cent.