Investing.com - Asian markets continued to fall in afternoon trade on Thursday, with stocks in China trading near their four-year lows following a slump in U.S. equities.
Overnight, the Dow Jones Industrial Average dropped by 831.83 points to 25,598.74; the Nasdaq Composite fell 4% to 7,422.05. The S&P 500 lost 3.3% to 2,785.68. Treasuries and the Japanese yen jump amid demand for safe-haven assets.
In Asia, China’s Shanghai Composite and the Shenzhen Component slumped 4.9% and 5.3% respectively by 02:00 PM ET (06:00 GMT). Hong Kong’s Hang Seng Index also plunged 3.9%.
China should consider using “more powerful” policy measures, such as a large-scale stimulus package, to support its economy amid intensifying trade disputes with the U.S., state-backed tabloid Global Times said in a commentary on Thursday.
“Depending on the economic situation, it [China] should prepare more powerful monetary and fiscal policy tools, possibly including a large-scale stimulus package,” said Global Times.
“Compared with the RRR level of 9.5% in 2007, there is still room for further reduction in the current ratios of 14.5% for large financial institutions and 12.5% for small and medium-sized lenders.”
BMW Group announced on Thursday that it would increase its stake to 75% from 50% in BMW Brilliance Automotive (BBA), its joint venture with Brilliance China Automotive Holdings Ltd (HK:1114).
Brilliance halted trading of its shares in the Hong Kong Stock Exchange on Thursday morning pending an announcement.
BBA also announced an investment of more than EUR3 billion (US$3.47 billion) in its plants in the city of Shenyang. A new plant in Tiexi District is expected to double in capacity while an existing plant in Dadong District will go through extensive remodelling and expansion.
The targeted annual production capacity of BMW automobiles at BBA plants is expected to reach 650,000 units from the early 2020s, providing 5,000 new jobs.
Meanwhile, U.S. President Donald Trump blamed the central bank’s policy decision for Wednesday’s sharp market decline.
“I think the Fed is making a mistake. They are so tight. I think the Fed has gone crazy,” the president said.
“Actually, it’s a correction that we’ve been waiting for for a long time, but I really disagree with what the Fed is doing,” he added.
The central bank hiked rates three times this year and traders widely expect it to raise it once more by the end of 2018.
Elsewhere, Japan’s Nikkei 225 plunged 4.2%, and South Korea’s KOSPI slid 3.8%.
Bank of Japan board member Makoto Sakurai warned that Japan’s economic growth could fall below the central bank’s projections if protectionist trade measures are allowed to spread.
Down under, Australia’s ASX 200 was also down 2.4%.
Earlier this week, the IMF downgraded global economic growth for the first time since July 2016. The fund said in its updated World Economic Outlook that it was now predicting a 3.7% growth, down from the 3.9% growth it forecasted in July.
The IMF and World Bank will hold meetings in Bali later this week.