insto - Australian financial markets

Global stock indices opened the week on the back foot as risk aversion in the resource and financial sectors retuned. The S&P500 traded down 0.3 per cent while European stocks fell 0.7 per cent. Japanese markets were closed for a public holiday, while the Hong Kong bourse traded down and Shanghai posted a slight gain.

US stocks were pounded on Monday as investors pondered whether we are seeing a healthy pullback or a return of a bear market.

The S&P500 closed 2.43 per cent lower while the Dow shed 2.00 per cent as a sell-off of financials and energy stocks accelerated at the close.

The VIX volatility index or ‘fear gauge’ spiked 16 per cent to 27.89, its biggest increase since April while counterparty risk also rose – 3 month Libor moved off its all time lows gaining 0.19 per cent to 0.4313 per cent.