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European Markets Rebound as Asia Recovers from Sell-Off
European markets opened higher on Tuesday with Germany’s DAX, France’s CAC 40, and London’s FTSE 100 all showing gains after a significant sell-off on Monday.
Japan’s benchmark Nikkei 225 index soared nearly 11% on Tuesday, recovering from a sharp drop that had contributed to a global market slump on Monday. Other Asian markets also saw a rebound, though to a lesser extent, indicating a stabilization after the week’s turbulent start.
Monday’s market plunge was reminiscent of the 1987 crash, sparking fears of a slowing US economy. The Nikkei gained nearly 11% early Tuesday and was trading 10.3% higher by early afternoon as investors sought bargains after the previous day’s 12.4% drop. On Monday, the S&P 500 dropped 3%, marking its worst day in nearly two years, closing at 5,186.33. The Dow Jones Industrial Average fell by 1,033 points, or 2.6%, to 38,703.27, while the Nasdaq composite slid 3.4% to 16,200.08 as major tech companies like Apple and Nvidia experienced significant losses.
The global sell-off that began last week was further fueled by a report showing a slowdown in US hiring, raising concerns that the Federal Reserve’s prolonged high interest rates might be stifling the economy too severely. A report from the Institute for Supply Management on Monday showed slight growth in US services businesses, particularly in arts, entertainment, recreation, accommodations, and food services.
Professional investors cautioned that technical factors might have amplified the steep losses. South Korea’s Kospi index dropped 8.8% on Monday, and Bitcoin fell below $54,000 from over $61,000 on Friday. Even gold, typically a safe haven during market turmoil, slipped about 1%.
On Tuesday, nearly all Asian markets, except Singapore, saw gains. The Kospi jumped 4.3% to 2,546.64. Hong Kong’s Hang Seng index rose 0.5% to 16,775.65. Australia’s S&P/ASX 200 edged 0.3% higher to 7,677.50. Taiwan’s Taiex gained 1.2% after an 8.4% drop the day before. The Shanghai Composite index, which had largely bypassed Monday’s turmoil, was up slightly to 2,861.87.
The dramatic market moves reflect fears that the US economy might be harmed by the Federal Reserve’s high interest rates, leading to speculation about a possible emergency rate cut. The yield on the two-year Treasury, closely tied to Fed expectations, briefly sank below 3.70% on Monday before recovering to 3.89%.
“The Fed could ride in on a white horse to save the day with a big rate cut, but the case for an inter-meeting cut seems flimsy,” said Brian Jacobsen, chief economist at Annex Wealth Management, noting that such actions are usually reserved for emergencies.
Despite the recent declines, the US economy is still growing, and a recession is not certain. The stock market remains up significantly for the year, with double-digit gains for the S&P 500, Dow, and Nasdaq Composite.
Other factors contributing to Monday’s market plunge include the Bank of Japan’s recent interest rate hike, which led to a stronger yen and impacted global trading strategies. Big Tech companies, particularly those involved in artificial intelligence like Nvidia, saw sharp declines amid fears that their stock prices had risen too quickly.
In commodities, early Tuesday saw US benchmark crude oil up $1.18 to $74.12 per barrel, and Brent crude rising $1.00 to $77.30 per barrel. The euro edged up to $1.0956 from $1.0954.
As markets continue to react to economic data and global events, the path forward remains uncertain, but Tuesday’s gains suggest a temporary stabilization after a volatile start to the week.
News
Investigation Underway After Goa Nightclub Fire Kills at Least 25
Authorities in the Indian state of Goa have opened an investigation into a nightclub fire that killed at least 25 people, including several tourists, in one of the region’s most popular party districts. Six others were injured in the blaze, which broke out shortly after midnight in Arpora, a nightlife hub about 25 kilometres from the state capital, Panaji.
Goa Chief Minister Pramod Sawant confirmed the death toll in a statement posted on X, saying the victims included many of the club’s kitchen staff and a small number of visiting tourists. He added that all the injured were in stable condition and receiving medical treatment. Rescue teams recovered all bodies from the site.
Early reports from local police, cited by the Press Trust of India, indicated that a gas cylinder explosion triggered the fire. Witnesses, however, told the agency that the blaze appeared to start on the club’s first floor, where nearly 100 tourists were dancing at the time. As smoke and flames swept through the building, many people ran toward the lower floor, where they became trapped along with staff members.
Sawant said a formal inquiry would determine the exact cause and whether the club complied with fire safety regulations. He pledged strict action against anyone found responsible, writing on X that any negligence uncovered by investigators would be “dealt with firmly”.
Eyewitnesses described scenes of panic as patrons attempted to flee the burning building. “We rushed out of the club only to see that the entire structure was up in flames,” said Fatima Shaikh, who was inside when the fire began.
Prime Minister Narendra Modi offered condolences in a message on X, calling the incident “deeply saddening” and wishing the injured a swift recovery.
Local media reported that the club’s location along the Arpora River backwaters posed challenges for emergency crews. A narrow approach road forced fire engines to park about 400 metres from the entrance, slowing their response. Reports also revealed that the building had previously received a demolition notice after officials found it lacked a construction permit. That order was later withdrawn by senior state authorities, according to Arpora councillor Roshan Redkar.
Incidents involving gas cylinders and electrical faults are not unusual in India and often lead to heavy casualties, prompting renewed calls for stronger enforcement of safety standards. Opposition leader Rahul Gandhi criticised the tragedy as a “criminal failure of safety and governance” and urged a transparent investigation to establish accountability and prevent future disasters.
The probe into the fire is expected to assess structural safety, emergency exits and compliance with existing regulations as authorities work to piece together how the late-night gathering turned into one of the deadliest incidents in the state in recent years.
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