Asian markets plunged Thursday morning following the worst session on Wall Street for months, as US President Donald Trump said the Federal Reserve had “gone crazy” with plans for higher interest rates.
The benchmark Nikkei 225, the Hang Seng in Hong Kong and the Shanghai Composite all plummeted more than three percent in early morning trade, as investors fretted about surging interest rates and an ongoing trade war.
“All bets are off,” warned Stephen Innes, head of trading at OANDA, adding that the markets “are fraught with peril.”
“The US equity bloodbath is taking no prisoners in Asia as a sea of red greets investors at the open, as equity deleveraging and liquidation intensifies,” he said.
Taiwan plunged nearly six percent, with Seoul down three percent and Sydney and Singapore both falling two percent. The steep drop in Asia followed a decline on Wall Street of nearly 830 points, the biggest fall since February, amid Trump’s latest criticism of the Federal Reserve, the US central bank.
“I think the Fed is making a mistake. It’s so tight. I think the Fed has gone crazy,” Trump told reporters as he arrived for a campaign rally ahead of the US mid-term elections.
He has frequently criticised the US central bank for gradually raising interest rates. Trump has repeatedly touted Wall Street records as proof of the success of his economic programme, including his confrontational trade strategy.
But he downplayed the first major drop in months, saying, “it’s a correction that we’ve been waiting for a long time.”
Financial Times: Asian shares tumble as global sell-off spreads