Global Markets: Stocks crumble in vicious sell-off as "goldilocks" trade unravels

Japanese stocks plunge 4% after Wall St sell-off

The U.S. dollar remained resilient despite the stock market sell-off, which at one stage Monday saw the Dow shed 1,597 points. "Rising volatility painfully reminds some investors that one-way bets don't exist".

Many in the markets had been anticipating some sort of correction following the steady gains over the past year or so, which have pushed some indexes, notably on Wall Street, to a series of record highs.

US stocks are reversing course Tuesday morning after sharp losses in the first few minutes of trading, raising hopes of a halt to a global sell-off in the stock market. Hong Kong's Hang Seng sank 3.9 percent to 30,996.51 and the S&P ASX 200 in Australia skidded 3.2 percent to 5,835.00.

Oil prices also dropped, with worldwide benchmark Brent futures hitting a one-month low before recovering to stand at $67.28 per barrel, down 0.5 percent on the day.

Global markets also fell.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan slid 3.4 percent.

Concerns were reignited that higher inflation in the USA will lead to a hike in interest rates which would harm markets reliant on the central bank's stimulus measures.

Large-capped issues tanked Tuesday, with Mitsubishi UFJ Financial Group dropping 3.7 percent to 790.60 yen and owner and operator of Uniqlo, Fast Retailing, lost 5.5 percent to close at 44,000 yen.

USA stocks went on another bumpy ride on Wall Street, dropping sharply in early trading before recovering their losses by lunch time.

Investors around the world have taken fright at the prospect of a higher than anticipated increase in USA interest rates this year in the event rising wages stir inflation. The one-day drop of 1,175 points was the biggest single-day point drop in history.

The Dow Jones industrial average plunged 1,175 points, or 4.6 percent, erasing its gains for the year. Australian shares dropped 3.0 per cent to their lowest level since October while South Korean shares dropped 2.0 per cent.

The Nikkei average ended the morning session at 21,487 - down 1,194 points from Monday's close.

By midday it was up 30 points, or 0.2 percent, at 24,395.

The drop in early trading Tuesday marked the third straight day of steep declines.

The sell-off started Friday when generally positive U.S.jobs figures showed strong wage growth, deepening concerns about inflation and possible rate hikes by the Federal Reserve - a good news is bad news scenario.

Since coming to office, Trump has repeatedly touted day-to-day stock market increases as evidence his administration is succeeding.

It's true that Wall Street has had a great run: the Dow Jones industrial average was up over 26 percent from January 2017 to January 2018.

The Dow recovered some of its early plunge and was down 127 points, or 0.4 percent, at 24,255. The Nasdaq composite was down 6 points, or 0.1 percent, to 6,956.

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