Nikkei drops 7.3%

<p>The Nikkei has ended a period of strong gains with heavy losses.</p>

The Nikkei index plunged by 7.3 per cent on the back of worse than expectated figures released for the manufacturing industry in China.

After growing by 50 per cent since the turn of the year, the sudden dip in the index is expected to have an impact on markets all over the world today (May 23rd).

European indexes have opened between two and three per cent down and this has been replicated in countries such as Australia.

"Volatility is in full force today, and nowhere more so than Japan," said Chris Weston, chief market strategist at IG Markets.

The Nikkei had been up by two per cent earlier in the day, reaching fresh five-and-a-half year highs as the index seemed to be continuing its steady growth of recent months.

But the contraction in Chinese manufacturing activity led to investors taking their money out of the market and several of the Nikkei's largest companies were down by more than 13 per cent.

Yesterday, strong gains from Sony had pushed the Nikkei to a new five-and-a-half year high of 15,564.90.

Learn about the Asian markets and CFD trading at City Index

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.