US crisis shakes the world’s stock markets
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Tuesday 08 October 2013
Global markets took another pounding on Monday as international pressure grew on the US to resolve its political deadlock and avoid an unthinkable default by the world’s biggest economy.
The lingering impasse between the White House and intransigent Republicans over Barack Obama’s health reforms has dragged the US shutdown into a second week.
But investors are growing increasingly anxious as the clock ticks down to October 17, when the US needs political approval to extend its $16.9trn (£10.5bn) debt ceiling or default on its debts. The sell-off began in Asia overnight as Japan’s Nikkei slid x.xx per cent and Hong Kong’s Hang Seng dipped x.xx per cent, hitting markets in Australia and India before spreading through European bourses. London’s benchmark FTSE 100 fell x.xx per cent while major indices in France, Spain and Germany also registered losses of x per cent or more.
China, which holds $1.3trn in US debt and is the nation’s largest creditor, also intervened yesterday. Vice- finance minister Zhu Guangyao said talks had taken place between Washington and Beijing and that China was “naturally concerned about developments”.
He urged the US to “resolve the political issues and prevent a debt default “to ensure safety of Chinese investments in the US and the global economic recovery.”
Investors were also unnerved by the World Bank lowering its growth forecasts for Asia, encouraging a flow of cash into safe havens such as the Japanese yen and Swiss franc.
The Independent's live blog of today's Premier League action
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