Dow Jones, the United States’ top share index, lost 1,175 points on Monday – almost 400 points more than the previous biggest decline in a single day during the financial crisis of 2008. The decline in percentage terms – 4.6% – was the biggest since August 2011, during the Eurozone sovereign debt crisis.
Earlier in the day, the index fell 1,600 points, but recovered later to close at 24,345.75.
The plunge prompted the BSE Sensex to close 561 points lower at 34,195.94 and the National Stock Exchange Nifty to end at 10,498.25 points, dropping 168 points. In the morning session, the 30-share index fell nearly 1,300 points within 10 minutes of opening trade.
Japan’s Nikkei index to lose 4% in early trade on Tuesday, and Australia’s S&P ASX 200 dropped 3%.
The White House assured investors and said it was focused on “long-term economic fundamentals, which remain exceptionally strong”, BBC reported.
The recent days of decline in share indices have come as a reaction of investors to changes in the outlook for the US and global economy. The free fall accelerated on Friday after data from the US Labor Department showed stronger growth in wages than was anticipated – which could push inflation up.
“People are dealing with the shock of seeing real inflation for the first time in a while,” Bruce McCain, chief investment strategist at Key Private Bank, told CNN Money.