Global stock markets have been volatile

Recently, the global stock market is like a giant ship struggling to move forward in the rough sea, drastic fluctuations are like surging waves constantly beating the hull, and its ups and downs are tightly affecting the sensitive and anxious heartstrings of countless investors.

On September 11, 2024, the global stock market once again set off a storm of large shocks. From the vast expanses of Asia to the financial centers of Wall Street, the performance of stock markets is a colorful and contradictory picture. In Asia, the Nikkei 225 stock average was hit hard, plunging 8.5 percent, a sharp drop that erased nearly a month of hard-fought gains. The once-high-flying Japanese stock market seems to have been hit with a pause button, as investors watch their wealth rapidly shrink in the pulse of the numbers. South Korea's Kospi index was not spared, plunging more than 7% in intraday trading, and the panic in the market spread like a virus. The plunge in the Korean stock market has sent investors into a deep panic.

In Europe and the United States, the stock market also presented a volatile complex situation. The pre-market trend of the US stock market is clearly differentiated, and the technology and semiconductor sectors are like two brothers with different personalities, and they are mixed. Nasdaq futures fell more than 3 percent, as if clouded by a gloomy outlook. S&p 500 futures edged down 1 percent, relatively flat but hardly giving investors much confidence. On the European side, the mixed trend is confusing. The Euro Stoxx 50 index rose more than 1 percent, as if there were a glimmer of hope amid the gloom. However, the main stock index futures in Germany and France were up 0.5 percent and down 0.8 percent, respectively, a difference that further added to market uncertainty.

There are many reasons for this round of global stock market volatility. First, the Bank of Japan's monetary policy adjustment is like a boulder thrown into a lake, which continues to create ripples in the market. Although the impact of interest rate hike and balance sheet reduction has been weakened to a certain extent, the fluctuation of the yen exchange rate is still like a non-time bomb, which has a profound impact on the global capital carry trade. Investors in the face of this uncertainty, as if in a fog forward, confidence in the market has been seriously hit. In order to reduce the risk, some investors choose to adjust the asset allocation, which further triggered the volatility of the stock market.

Meanwhile, U.S. economic data presented a mixed picture. The latest non-farm payrolls data came in slightly better than expected, offering some comfort to the market. However, the unemployment rate remained relatively high at 4.2 percent, indicating that the labor market remains under some pressure. In this context, the Federal Reserve's monetary tightening policy continues to receive high attention from the market. Worries about the future economic outlook remain with investors worried about the dampening effect of monetary tightening on economic growth.

However, the volatility in global stock markets was not overnight, and markets had already shown some signs of instability before it. Previously, the volatility of US employment and industrial activity data has caused widespread concern in the market. The August jobs report, which showed the unemployment rate fell slightly but remained high, triggered deep concerns about the sustainability of the recovery. If the pace of economic recovery is not sustained and steady, then the stock market, as a barometer of the economy, is bound to fluctuate greatly.

The volatility of the global stock market also has different degrees of impact on the stock markets of different countries and regions. In the Asia-Pacific region, Japanese and South Korean stocks continued to be hit hard. In Japan, the Nikkei 225 index and Topix index both fell sharply, and investors' confidence was hit. Financial, technology and auto stocks, which were once market darlings, have not fared well in Japan's component stocks. The semiconductor sector is still weak, as if Mired in an endless mire. South Korean stocks also fell sharply, with the kospi index falling 6.77 per cent, and the panic in the market reached its peak as the session again approached a circuit breaker. Other Asia-Pacific stock markets such as the FTSE Malaysia Composite Index, Vietnam vn Index, Australia's s&p/asx200 index have also fallen to varying degrees, the entire Asia-Pacific stock market seems to be in a haze.

In terms of European and American stock markets, although there has been some adjustment pressure before, the volatility of the global stock market has further exacerbated its uncertainty. The Dow Jones Industrial Average, the Standard & Poor's 500 Index and the Nasdaq Composite Index all rose or fell in varying degrees, and these important indexes act as bellwethers to guide investor sentiment. Europe's major stock markets also struggled to find their way amid the volatility, with investors looking for a beacon of light like a ship lost at sea.

How should investors react to the wild swings in global stock markets? First, investors need to remain calm and avoid being swayed by market sentiment. Before making investment decisions, it is necessary to fully understand the fundamentals of the market and the macroeconomic situation, and conduct in-depth analysis and research. Second, investors can reduce risk by diversifying their investments. Don't put all your eggs in one basket. Allocate your assets appropriately, including stocks, bonds, funds, real estate and other different types of investments. In addition, investors can also focus on some industries and enterprises with long-term investment value, such as technology, healthcare, consumer and other fields, which have strong resilience and potential in economic development. Global stock market volatility is the result of a combination of factors. Investors need to be vigilant and keep an eye on market dynamics to make informed investment decisions. In this market full of challenges and opportunities, only by constantly learning and adapting to changes can we sail more soundly in the choppy sea of the stock market.