Stock markets tumbled amid fear of US entering recession. The Bucharest Stock Exchange opened on -3.8%
Get real time updates directly on you device, subscribe now.
Stock markets tumbled on Monday, with Japanese shares down 12.4%, the biggest daily drop since Black Friday in 1987, on fears that the United States could be headed for recession, which has prompting investors to flee risky assets and bet on rapid rate cuts to save growth, reported foreign media outlets, including Reuters and Telegraph.
Although in the case of Japan the massive selling of shares is also linked to the appreciation of the yen (+9%, since the beginning of the year), all these corrections are related to the data of the American economy, announced on Friday, which suggest that the postponement of interest rates by the Fed risks bringing recession back to the US. The Financial Times reports that the massive sell-off is likely to continue in Europe and the US. The US Federal Reserve (Fed) decided last week to keep interest rates on hold, but economic data on Friday showed a slowdown in new job creation suggesting the US economy is at risk of stagnation or even recession. This caused a sharp correction in the US markets, the only ones still open on Friday evening. The Nasdaq Composite index, which includes the most important technology companies, ended the week down -3.4%, and on Saturday Warren Buffett revealed that he has already sold half of his stake in Apple.
The contagion effect seems to have also affected the Bucharest Stock Exchange. On BVB, at this time, the main index BET is down almost 4%.
European bank shares were hit hard this morning, pushing the pan-European Stoxx 600 down -4.6% in early trade, its lowest level since March. The FTSE 100 (London) fell by up to -2.2% and the Dax index (Frankfurt) by -3%. The Bucharest Stock Exchange opened on -3.8%.
“We have to be concerned (due to the turbulence in the global markets – n.ed.), but not panic. For Romania, the bad part of such episodes of turbulence in the financial markets is that we are quite exposed, especially in light of the relatively high dependence on capital inflows to finance the budget deficit. A possible flight of capital to safer markets could leave us exposed in the short term,” Valentin Tătaru, chief economist of ING Bank, told HotNews.ro.
The Board of the National Bank of Romania (BNR) is scheduled to convene in a monetary policy meeting on August 7.
DONATE: Support our work
In an ever changing and challenging world, the media is constantly struggling to resist. Romania Journal makes no exception. We’ve been informing you, our readers, for almost 10 years, as extensively as we can, but, as we reject any state funding and private advertising is scarce, we need your help to keep on going.So, if you enjoy our work, you can contribute to endorse the Romania Journal team. Any amount is welcome, no strings attached. Choose to join with one of the following options:
Donate with PayPal
Donate by Bank Wire
Black Zonure SRLUniCredit Bank. Swift: BACXROBU
RON: RO84 BACX 0000 0022 3589 1000
EURO: RO57 BACX 0000 0022 3589 1001
USD: RO30 BACX 0000 0022 3589 1002