Nasdaq's Largest Drop Since May 12
Fed FOMC Regular Meeting Also Fuels Index Decline
[Asia Economy International Department Reporter] The US New York stock market declined amid bankruptcy rumors surrounding Chinese real estate developer Evergrande Group. The Federal Reserve's (Fed) Federal Open Market Committee (FOMC) regular meeting, held over two days starting on the 21st, also negatively affected investor sentiment.
On the 20th (local time), major indices on the New York Stock Exchange (NYSE) all fell. The Nasdaq index, centered on technology stocks, closed at 14,713.90, down 330.06 points (2.19%) from the previous session. This is the largest drop in over four months since May 12.
The Dow Jones Industrial Average fell 614.41 points (1.78%) to close at 33,970.47. During the session, the decline reached as much as 900 points (2.6%). The Standard & Poor's (S&P) 500 index dropped 75.26 points (1.70%) to 4,357.73.
The simultaneous decline of major indices was due to market concerns over the Evergrande Group crisis rumors. As of the end of last year, Evergrande Group's total debt reached 1.95 trillion yuan (approximately 350 trillion KRW), and if it goes bankrupt, the shockwaves are expected to spread throughout the Chinese economy.
Hong Kong's Hang Seng Index also plunged by 3.3%, and the pan-European Euro Stoxx 50 index fell by 2.11%, with European stock markets also declining across the board.
The Fed's FOMC regular meeting further fueled the index declines. CNBC reported that investors are spreading expectations that the Fed may signal a change in its monetary expansion policy stance, considering the recently improving labor market conditions and inflationary pressures.
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