BEIJING, Feb. 9 (Xinhua) -- Major stock markets around the world suffered sharp sell-offs Friday, driven by another day of heavy selling on Wall Street.
Japan's Nikkei fell 2.3 percent, bringing its weekly loss to 8.1 percent. It is now at levels not seen since mid-October. On Tuesday, Japanese stocks had suffered their sharpest point losses, with Nikkei plunging 4.7 percent.
The Hong Kong Stock Market on Friday dropped more than 3 percent to put it on course to wipe out its 2018 gains.
On Thursday, both Dow Jones and the S&P 500 registered a 10-percent drop from their highs at the close, entering "correction" territory, according to Wall Street's traditional definition.
The Dow closed down 4.1 percent Thursday, falling by more than 1,000 points for the second time this week.
Major indexes in Europe also fell Thursday. Britain's FTSE 100 fell 1.5 percent. Germany's DAX lost 2.6 percent while France's CAC 40 ended down 2 percent. European stock markets plummeted further in initial trading Friday.
The drops followed a harrowing day for investors in the United States on Monday, where the Dow plummeted 1,175 points, or 4.6 percent. It was the blue-chip index's biggest ever point decline in a single day.
What happens on Wall Street ripples around the globe since the United States is the world's largest economy and home to the biggest financial markets. Also, the U.S. dollar is the currency of reference for investors around the world.
Analysts are trying to figure out whether it is a short-term correction for markets that had hit record highs recently or a sign of market turndown.
A series of concerns fueled the selling.
It was widely believed that an upbeat jobs report released by the U.S. Labor Department last Friday showing surprisingly fast-rising wages gave rise to concerns of rising inflation.
One concern was that an overheated economy would force the Federal Reserve to take more rapid steps to raise interest rates, the benchmark 10-year yield spiked to a four-year high of 2.85 percent, triggering global equities market sell-offs.
Thursday's story was similar. A 10-year yield flirted with a four-year high and the equities market plunged.
Bruno Braizinha, U.S. rates and global asset allocation strategist at Societe Generale, said the recent sell-off had a chain of casualties: the global risk sentiment was driven by U.S. equities, U.S. equities are driven by U.S. bond yields, and the bond yields are affected to a significant degree by core eurozone yields.
What's happening now is that "the whole world is trying to normalize policy, and the market is in its negative feedback loop where it will react violently," he said, adding, "Global central banks will have to nuance the message a little bit, and then we will find some consolidation."
Some experts held more optimistic views.
"There is nothing serious to worry about. The fundamentals of the economies of the United States, West Europe and China are all there and all good... (the Trump) tax cut is not going away," Peter Costa, president of Empire Executions, said.
