NYSE's Dow Jones Industrial Average plummeted more than 400 points on Tuesday on concerns about US and Chinese economies.
On Tuesday, Chinese stock markets saw a 9% slide amid speculation that Chinese government is getting ready to take action to slow down the rapidly growing economy. The Chinese government fears that rapid growth in certain sectors and excessive speculation in stock markets may create a bubble in the economy. Authorities in China have also announced a special committee comprising of stock market regulators, the central bank, trade ministry and police to check illegal funding and trading activities in the Chinese stock markets.
NYSE's DJIA started in the negative territory on Tuesday and kept falling all day. The recent data released on US economy has not been very encouraging - indicating a slowing down of the economy, especially the housing sector. Tuesday's fall in US stocks was exaggerated by a computer glitch at NYSE. Unable to handle high trade volumes, NYSE brought its backup system to work and this caused a sudden fall in the reported value of DJIA.
This huge fall has wiped out all gains made by the DJIA this year. US stocks lost as much as $632 billion in market capitalization on Tuesday's fall.
All Asian markets were down in early trade on Wednesday as well.
