World stock markets experienced a dark day on Monday due to the collapse of the Japanese trading floor. The Japanese Stock Exchange (Nikkei) suffered its worst session since 1987, registering a fall of 12.4%. This plunge was driven by the strengthening of the yen and fears of a recession in the United States, which has had repercussions on global markets.
Repercussions in Europe
In the morning, the collapse of the Nikkei pushed European stock markets into the red from the opening. The IBEX 35 fell as much as 3% during this fateful day, closing with a loss of 2.34%, to 10,423 points. This is the biggest decline recorded by the Spanish index since March 2023.
Within the IBEX 35, no stock ended the session in green numbers. Fluidra led the losses, with a drop of 6.36%, followed by Enagás, which fell by 5.14%. Among the large stocks, Repsol fell by 3.36%, Santander by 1.58%, BBVA by 2.03%, Iberdrola by 3.28% and Telefónica by 2.04%. At the close, Inditex was the stock that lost the least, with a decline of 1.07%.
Impact on other European stock exchanges
In the rest of Europe, declines were also significant. Milan and London registered declines of 2.27% and 2.04%, respectively. The Frankfurt stock exchange gave up 1.82% at the close, while the Paris stock exchange fell by 1.42%. In this session, the euro rose to 1.0979 dollars, its highest level since January.
Falls on Wall Street and Latin America
Later, the declines extended to Wall Street. The Dow Jones fell 2.6%, its worst day since May 2022, while the Nasdaq fell 3.43% and the S&P 500 lost 2.98%. Latin American stock markets also joined the black Monday, led by Argentina, where the S&P Merval fell 4.31%. The Chilean, Colombian and Brazilian markets registered losses between 2% and 3%.
The stock market plunge also affected cryptocurrencies. Bitcoin fell more than 13% to $51,300, while Ether fell 18% to $2,258.27. This drop reflects the volatility of the cryptocurrency market in the face of global economic uncertainties.
Among the main causes of the plunge in Asian stock markets is the fear of a recession in the United States, due to the poor employment data released last Friday. This plunge could force the Federal Reserve to intervene more aggressively on interest rates.
Another important factor was the strengthening of the yen, which reached its highest level in six months due to the Bank of Japan's latest rate hike, hurting large Japanese exporters.
In this scenario, the Japanese government was quick to send a message of calm. The Japanese Finance Minister, Shunichi Suzuki, assured that they are "watching the fall of the stock market with attention and great interest".
Black Monday in global markets highlights the interconnectedness and fragility of economies in the face of significant fluctuations. Attention now turns to the political and economic responses that will be implemented to mitigate the effects of this crisis.
