October 11, 2018 (LBO) – Global markets are plunging with many indices around the world falling sharply. The carnage was triggered by a spike in U.S. 10 year treasury yields up to 3.25%.
The Dow Jones Industrial Average and the S&P 500 were down over 3% on Wednesday, while the Nasdaq was down over 4%. Futures are dropping indicating that the selloff will continue when the market opens on Thursday.
Asian stocks are following suit with the major Chinese and Japanese indices also down 3-4%. The Chinese A shares index is down over 20% on the year as China so far has emerged as the clear loser in the trade war with the United States. Despite the recent carnage, U.S. stock indices are still positive on the year.
Sri Lankan stocks seem be unaware of what is happening overseas with major indices flat 40 minutes into the trading day. Brokers are waiting to see whether investors suddenly wake up and start selling in line with global markets. Analysts say that foreign sellers would be the ones who would trigger a selloff as local participation in recent weeks has been very light.
Sri Lanka’s major indices have been losers on the year with the ASPI and the S&P SL 20 down close to 10% and 20% respectively. This coupled with a more than 10% devaluation in the currency (LKR) has made 2018 a tumultuous year so far for Sri Lankan markets.