A Look at the Nikkei's Fall; Now in a Bear Market

A 10% drop in a major global equity market index is a significant event, and below we provide three charts highlighting today's big down move in the Nikkei-225.  The first chart highlights the intraday movement in the Nikkei.  While it ended the day down 10.55%, it's important to note that the index was actually down 14.48% at its low for the day and then rallied a whopping 7.52% before settling at its closing level.

The six-month chart of the Nikkei shows just how sharp the declines over the last two days have been.  All of the gains made since the fourth quarter of last year have now vanished. 

Lastly, we provide a chart of the Nikkei since August 2007, which was before the global financial crisis got underway.  While most global markets peaked recently in February, the Nikkei actually hit its bull market highs nearly a year ago.  The declines over the past two days have left the index down 24% since its highs last year.  This means the index is now in a bear market (-20%).  As shown, the index is now up just 22% from its financial crisis lows.