reasons behind the turbulence in global stock markets
recently, global capital markets have been swept up in sharp volatility, with stock and exchange rate markets going through roller-coaster rides. on august 5, the japanese stock market fell. the nikkei 225 index plunged 12.4%, triggering circuit breakers twice during the session and wiping out all gains made earlier this year. the korea composite stock price index (kospi) fell by 8.8% and triggered the circuit breaker mechanism. meanwhile, the three major us stock indices also declined, though they were contained in a narrower range of 2-3%. but the next day, global stock markets rebounded strongly. the nikkei 225 index surged by 10.2%, kospi rose by 3.3%, and all three major us stock indices saw an upswing.
the significant turbulence in global stock markets, as exemplified by the japanese stock market, can be attributed to two main reasons:
