Vaporing Trillion Dollars
According to Bloomberg, escalating military tensions between the United States and North Korea have caused the global stock market capitalization to fall 1.8% from US$79.5 trillion to US$78.03 trillion from August 8 to 11.
The fall in market cap started with U.S. President Donald Trump’s “fire and fury” remarks on August 8. During the three days, the South Korean stock market took the biggest hit and lost more than 77 trillion won (US$69 billion) in market cap.
The global stock market capitalization fell 0.1% on August 9, 0.53% on August 10, and 1.24% on August 11. The U.S. stock market lost 1.93% of its aggregate market value during the same period.
As mentioned above, it is the South Korean stock market that has suffered the most. Its aggregate market value dropped about 4.4% in just three days from US$1.5232 trillion to US$1.4555 trillion. The ratio of its market cap to the global stock market capitalization decreased from over 2% to 1.86% between late July this year and August 11. Likewise, the ratio of the U.S. stock market capitalization to the global total fell from over 35% to a one-year low of 34.53% between early this month and August 9.