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Stock markets slump amid concerns over weak global growth

  • 24 May 2022

US stock indices pulled back at the opening bell while Snap, the parent of social media app Snapchat, saw its share price slump 36 percent as trading began on Wall Street.

The tech-heavy Nasdaq Composite quickly sank more than two percent after trading began on Tuesday. ( AP )

Stock markets decline amid concerns over weak global growth and with a profit warning from the owner of Snapchat spooking investors and further shocking the tech sector. 

The retreat comes amid concerns over the impact of China's Covid-19 restrictions on the world's second-largest economy after the United States.

Monday's strong Wall Street rally, where the Dow closed up two percent, did not carry over into Asian and European trading, and US stock indices pulled back at the opening bell on Tuesday.

Snap, the parent of social media app Snapchat, saw its share price slump 36 percent as trading began on Wall Street.

"Snap provided a shock," noted Neil Wilson, chief market analyst at Markets.com.

The company "spooked the market with a macroeconomic warning that dented tech the most and pointed to earnings revisions that could drag the market lower for longer", he added.

The tech-heavy Nasdaq Composite quickly sank more than two percent.

China's measures not enough to calm investors

The biggest faller in London Tuesday was however energy group SSE, whose share price dived 6.7 percent on reports that the UK government may impose a windfall tax on excess profits enjoyed by electricity producers.

Prime Minister Boris Johnson has so far indicated he does not want to impose such a tax on oil and gas producers despite them also earning vast sums as prices soar.

Johnson argues an exceptional levy on the likes of BP and Shell would harm their efforts to invest in greener fuels like solar and wind power.

In China, Beijing's announcement Monday of a fresh raft of measures to stimulate the economy did little to calm investors' nerves.

China's economy has taken a hit from Beijing's zero-Covid approach to the pandemic, which has resulted in lengthy lockdowns of major cities and mass testing of millions of people.

Prolonged virus lockdowns have constricted supply chains, dampened demand and stalled manufacturing.

FOR MORE: Are we in a 'new phase' of financial market sell-offs?

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