SHARE prices acquire been falling persistently since the start of 2016 with markets in Europe and Japan falling more than 20% from their recent highs,the technical definition of a bear market. Bear phases are reasonably common; the S&P 500 index has suffered at least 15 of them since 1929, although it has yet to meet the definition this time round.
It is never possible to be definitive about the reasons for a stockmarket fall. Investors dont acquire to fill in a form explaining their reasons for selling shares. The current explanations for the current decline involve worries about the health of the Chinese (and thus the global) economy; concerns that corporate profits may be falling; and fears that the Federal Reserve may acquire tightened monetary policy too soon when it raised interest rates in December. And a survey of fund managers by Bank of America Merrill Lynch indicates these explanations are roughly honest; optimism about the global economy has declined, or more than half think profits will fall over the next 12 months and a Chinese recession is perceived to be the biggest risk.
Another way of understanding the decline is...
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Source: economist.com