Needless to say, the carnage in Asia that began at the open on Tuesday morning did not abate and by the time it was all said and done, it was a massacre. And the thing is, we don’t need to try when it comes to the hyperbole because simply stating what actually happened is hyperbolic enough, a state of affairs that underscores how bad things really were.
After a rough open documented here, the Nikkei closed lower by nearly 5%, bringing the two-day decline to a harrowing 7.2%. Here’s some perspective:
And as noted at the open, the Nikkei has now fallen into a technical correction, diving 12% from its 26-year high of 24,124.15 hit on January 23:
Vol. of course spiked, with Nikkei Stock Average Volatility Index up some 52% on the day:
In Hong Kong, things were not any better – in fact, they were worse. The Hang Seng plunged 5.1%, in the largest single-day selloff since the aftermath of the yuan devaluation in August 2015:
Total stock turnover on Hong Kong’s main board hit HK$225 billion. That’s the first time turnover has topped HK$200 billion since July of 2015.
H-shares were a disaster, diving a laughable 5.9%, wiping out a good portion of the gains from January when the Hang Seng China Enterprise Index at one point rose for 19 consecutive sessions:
On the mainland, things were only marginally better and by “better” I mean the worst day for the SHCOMP since early 2016 when China jitters were poised to upend the global recovery:
For the ChiNext and the Shenzhen, things were even worse, as the former fell 5% and the latter more than 4%. Believe it or not, the ChiNext is back to where it was before hordes of leveraged, day-trading housewives drove Chinese equities into the stratosphere in 2015:
As for the Shenzhen, it’s at its lowest since March 2016:
And we could of course go on. And on. And on. But you get the idea.
As we noted on Monday morning, this is always a question of who’s “catching up” with who. Past a certain point, people lose track of where it started and thus, these selloffs feed back into their source as everyone loses track of what the source actually was, on the way to simply trading off whatever happened overnight.