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Stock markets are recovering after a sharp drop


August, 06 2024
watermark Economic news

Japanese stocks soared at the opening of trading on Tuesday, after representatives of the central bank reassured investors and instilled confidence in them.


The Nikkei index soared by more than 10.12% to 34,641.99 points in the first minutes of trading, significantly exceeding Monday's closing figure of 31,458 points. Recall that on the previous day, the index fell by 12.4%.


However, experts warn that the level of implied volatility of the Nikkei has reached a record 70%, which suggests the possibility of continued sharp fluctuations in the near future.


The US stock market showed signs of stabilization: futures on the S&P 500 rose by 0.9%, and on the Nasdaq – by 1.2%. For comparison, on Monday, the S&P 500 lost 3.00%, and the Nasdaq Composite lost 3.43%.


The foreign exchange market is also showing an improvement in the situation. The US dollar rose to 145.64 yen, down 1.5% from the previous level of 141.675 yen. Against the Swiss franc, the dollar also compensated for its losses – the greenback is holding at 0.8546 francs after a low of 0.8430. 


The yield on U.S. Treasury bonds also rose to 3.84% from a low of 3.667%. This was partly due to the recovery of the US ISM index to 51.4 in July. At the same time, the employment index jumped by 5 points to the level of 51.1. This suggests that last week's employment report may have exaggerated the weakness of the labor market.


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Foreign exchange is highly speculative and complex in nature, and may not be suitable for all investors. Forex trading may result in a substantial gain or loss. Therefore, it is not advisable to invest money you cannot afford to lose. Before using the services offered by ForexMart, please acknowledge the risks associated with forex trading. Seek independent financial advice if necessary. Please note that neither past performance nor forecasts are reliable indicators of future results.