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most glorious stories about motivational change makers taking their destinies into their own hamstrung his new multimedia series. d.w. dot com africa on the most. the dow jones industrial average takes is biggest nosedive since twenty eleven rattling investors across the globe in the wake of the drop in new york markets in asia tumbled and european indices also began the day in there good of territory are we seeing the opening stages of a real market crash. well this is the business under how the office in berlin. many are already talking about a black monday but that might be a bit premature in financial circles this term is reserved only for the most severe

of shocks but after a rally that has been going on for many months monday was a busy day of reckoning on u.s. markets let's have a closer look the dow jones industrial average tumbled four point six percent is the biggest loss for six years and marks the largest intra day decline of all time in asian markets picked up the sentiment in tokyo the nikkei closed down four point seven percent hong kong minus five point one and shanghai's s.s.i. was three point four in the red now what caused this sell off in the u.s. as a combination of factors at play wages have risen stronger than expected stoking fears of rising inflation that will drive interest rates up and it was cheap money that has been driving the stock market rally over recent years also a rise in rates makes a facets like government bonds more attractive so investors move out of stocks and into those assets also automated trading orders are triggered when certain

indicators fall to a preprogramed level and these sell off sell offs trigger other sell orders it's a computer driven domino effect and it works within seconds around the globe's so markets in asia have taken the lead from the u.s. as we've seen and a quick look at let's have a look now at how european markets are doing cope our financial correspondent is standing by in frankfurt for us at the moment it looks like european investors are a bit less panicky other way. yeah you heard i guess investors here behind me at the frank for stock exchange are really relieved that we are not seeing this big crash that many investors were actually expecting this morning and early trading shares here at the blue chip index dax were down with more than eight percent now when you look at the router and legs dax but also around europe yes we are seeing big losses most of the indices are down at the moment with a true percent but investors really seem to realize that the world has not really

changed compared to yesterday that the market environment in general is still very song we are not going to see a recession of course there is this fear of higher interest rates of higher interest rate of more interest rate hikes this year in the united states but at the same time it seems that we are not seeing this massive panic that we were really seeing yesterday happening on wall street also i was just talking to an expert here at the trading floor they are also not expecting at the moment that we're really going to see a long term correction off the market. thank you very much for this update. now as we know misery loves company and beleaguered u.s. stocks soon found fellows suffer elsewhere in the world asian and disease as we've seen was eve to russia used to end dismal futures ahead of doe dow jones opening

could mean the beach is not over yet. the hong kong stock market was one of the worst performers on a day when asian markets weren't able to protect themselves from contagion after the dow industrials steep a sell off in six years. the sentiment in hong kong and there are a little bit nervous and a little bit not going to have and people are still waiting for. the dow jones or the do as markets will stabilize before they can come be fully committed to buy into the market at this point japanese stop spring spared either anxiety is writing high like. normal it's probably because of the plunge in the u.s. i thought the economy was in good shape but share prices going up stupidly but a sudden drop like this makes them look and clear the stock prices went up too far without theories and it's time to hold tight but you cons chief cabinet secretary

cut a more circumspect figure so if push through a government has not changed our view that the global economy including that of the u.s. continues to be firm but watch how the worldwide financial markets develop it will . commit. in the u.s. where the turmoil kicked off the government also highlighted the robustness of the economy in the last jobs report two hundred thousand more jobs created unemployment for the seventeen year was. probably the most encouraging number for me as a former governor that watched how stubborn the wage number of years in this country has seen wages rise by the point nine percent the most recent report but imbedded in those numbers is the source of at least some of the investors anxiety growing wages for workers could mean shrinking profits for shareholders and a tightening labor market could pave the way for steeper rate hikes and a looming and to easy money u.s. stock futures have slid further since all street closed indicating continuing

volatility. now we see the beginnings of a real crash let's get some more analysis on the background of this plans and world markets so we're now joined by michael hewson he's the chief market analyst at c.m.c. markets in london michael thanks for joining us is this a proper crash or is it just the market correction that has been over due. i think it's a long market correction we've been rising quite steadily for the toss to the story is now and we really haven't seen this talk of correction for all of that time. and i think it's also important to say that the stock market is not the economy when the economy starts with improve interest rate starts to go up sometimes you get this divergence whereby the market starts a price in higher interest rates a much more positive outlook but it actually has the effects because the stock

market is a forward looking indicator of printing about a profit psyche and i think that's what we're seeing here i mean it just brings me to that it is is it justified if we're looking at the fundamentals in the u.s. . i think it is absolutely justified by small case last friday's wage growth was the last piece of the puzzle and ultimately i think investors need a very good reason when u.s. stocks are trading significantly above the european counterparts in terms of valuation to continue to buy them and what we've had to tie is a little bit of a feedback loop in terms of the fact that investors haven't had downside protection and that's prompted the selloff that we've seen over the course of the past forty eight hours michael used their free agency. it's rather in london thank you very much for joining us thank you hong kong is one of the most expensive

cities in the world to live in according to a study conducted by doj a bank less than a fifth of households can actually afford the rent on their apartments local residents are forced to accept the skimpiest of accommodations just in order to stay off the streets and the problem is said to get worse. elderly people like shouldn't be in london and have it easy in hong kong he shares a room with eight other men and pays one hundred fifty euros a month for the cage where he has his bed. mostly is i'll tell you both my parents died when i was forty years old i gradually lost touch with my brothers. we hardly see each other anymore now it is. to do. with this exhibition in aid organization wants to raise awareness about such living conditions around two hundred thousand people in hong kong are affected educate

then you get all that you he then you know they're all buildings so people with anything in this condo all ready human. and even space is to a small one and that is shared with so many households and the income is very delicate. hong kong has limited land for new housing now the finance hub is facing a squeeze as more seniors and young single seek to live alone a three room apartment in the city center can cost the equivalent of eight thousand euros a month rents in hong kong are the highest in asia when hong kong attract international money to come in and write their speculation investment right jack up housing fries and rights and because of that then people can afford right to own or to read and. a typical. housing unit.

that's resulted in an upsurge in minimal living spaces entrepreneur eric wong sells these earthquake proof sleeping cabins equipped with wife by air conditioning and t.v. . so far most of his buyers have been hotels throughout asia. the hong kong i think apartments in hong kong will get smaller and smaller but the property prices are already so high that the younger generation can't afford. maybe in the future they won't just sleep in space capsules like these for a day or two but actually live in that way a lot of. the hong kong government has promised to take action senior citizens are now supposed to get priority in subsidized housing but the waiting lists are long probably too long for seventeen year old son in law the only way for him to escape his cramped living space is to go outside. and that was on the. off the story which you can find on our website in our series follow us about it and that's

it for me and the business team here and i'll have an update for you of course in the next hour and meantime all twitter and facebook feeds for more business news stories before we go here's a check on global markets and for watching but i. want . to.

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