As trading opened on Monday, shares that are traded on Wall Street dropped sharply, following the decline of the FTSE 100 amid major sell-offs in equity markets across the globe.
In early trading, 0.5 percent was lost by the S&P 500 following its drop to its highest loss in two years last Friday, while 0.34 percent was wiped away from the Dow Jones Industrial Average.
The benchmark stock indices in Italy, Spain, and France all lost over one percent, dragging the Stoxx 600 index, which tracks the largest companies across Europe, dropping by 1.5 percent at around 3 in the afternoon.
In morning trading, the blue-chip index of London lost more than one percent to hit reach its lowest point since the 8th of December.
The share prices of the huge majority of the companies that are included on the FTSE 100 had dropped at around 3 pm, with particularly steep declines for Rolls Royce, Vodafone, and Old Mutual.
Earlier, the markets in Asia tumbled, with the Nikkei 225 of Japan down by 2.55 percent. The composite index of Hang Seng of Hong Kong lost 1.21 percent, while the shares in Shenzhen lost 0.84 percent – even though the Shanghai market continued to be buoyant, with an increase in shares.
The sell-off comes after a painful week for equity investors in the United States, culminating in the largest one-day sell-off on the benchmark S&P 500 index after two years.
On Friday, more than two percent was lost by the S&P 500 – in spite of the continued strong earnings from large companies – for the first time during the administration of Donald Trump, the President of the United States of America, as investors begin to fear a quicker pace of monetary tightening from the central banks.
Last Friday, the wage data of the United States revealed that the average hourly earnings increased by 2.9 percent in the year to January, its fastest pace since 2009. This prompted concerns of investors that higher inflationary pressures in the United States could urge the Federal Reserve to accelerate its pace of hikes in interest rate, slowing the supply of easy money that has helped to stimulate the largest economy of the world.