US markets open low, extending worldwide selloffs

Washington, Aug 05: Trading on the US stock market on Monday began with another sell-off over recession fears extending the worldwide slump that started in Japan and spread across India and South Korea in Asia and and Europe.

The Dow Jones Industrial Average was down 1,197, or  3 per cent, at 5 minutes past 9:30 am on the East Coast. The Nasdaq composite dipped 5.5 per cent the S&P 500 was down by 4 per cent in early trading.

These indices had ended 1.5 per cent, 2.4 per cent and 1.8 per cent on Friday, the day of the shocking US job report that hirings in July were way below expectations and with unemployment up to over 4 per cent sparked concerns of a recession.

There are fears that the US Federal Reserve may have delayed a cut in interest rate too long keeping it up at a two-decade high. It is expected to announce cuts anywhere from 0.25 percentage points to 0.75 percentage points after its next meeting, which is due on September 18.

The futures indices were down before the opening of the market indicating the selloffs that started in the US on Friday had travelled around the world and returned to the US for another round.

Monday's slump started early in Japan with the Nikkei 225 falling more than 12 per cent, the worst one-day drop since Black Monday in 1987.

South Korea’s benchmark Kospi index fell more than 10 per cent at one point.

Stocks were lower in Singapore, Australia, Hong Kong and mainland China. In India, stocks graded 2 per cent lower.

Technology shares were taking a beating specifically and the situation was exacerbated for Apple, for instance, by Warren Buffet’s Berkshire Hathaway offloading all its shares in the company. These selloffs are also triggered by below-expectations of returns announced by technology companies.