Wall Street looks grim as the overseas markets tumble
On Thursday the Asian stock markets plunged again and the European stock market soon followed since investors were fleeing from the fallout of the troubled U.S. mortgage market. As such, the U.S. stock market also looks as though it is headed for a sharp fall as well.
Some Asian shares had risen to record levels this summer but they began to tumble last week due to fears that global banks may be exposed to problems in the United States’ subprime mortgage market as loans to borrowers with weak credit histories were still being made. Fortunately, it is expected that this damage will be limited. Nevertheless investors did not want to wait around to find out and thus they were cashing in their profits on the stocks that had reached stratospheric levels.
Since Friday Japan’s central bank has made 3 interventions in the market in order to calm investors’ fears. On Thursday they placed $3.4 billion into money markets. However, many of those who work in the Asian stock markets say that this damage was not unexpected but the extent of the damage is unknown as of yet. So far though, at least 3 Asian markets lost more than 6% on Thursday.