What is Black Monday?


In October 1987, the stock market fell unexpectedly, causing worldwide economic instability.

The sudden drop is now known as Black Monday.

Black Monday marks a major stock market crash of the 1980s

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Black Monday marks a major stock market crash of the 1980sCredit: Getty Images

What is Black Monday?

The name given to the stock market crash on Black Monday October 19, 1987.

At the time, 23 major world markets suffered a sharp decline.

When measured in USD, eight markets fell between 20 and 29 percent, while three were between 30 and 39 percent – Malaysia, Mexico and New Zealand.

In Hong Kong, Australia and Singapore, the market has fallen more than 40 per cent.

Austria experienced the smallest drop, with a drop of 11.4 percent. Hong Kong was the most intense, with their market falling by 45.8 percent.

Worldwide losses at that time were estimated at about $ 1.71 trillion in USD.

Many believed that Black Monday would begin the second Great Depression.

How did Black Monday affect the United States?

Between August 1982 and 1987, the Dow Jones Industrial Average rose from 776 to 2,722.

At the time, the average number of shares traded on the New York Stock Exchange rose from 32 million to 181 million shares.

Just days before Black Monday, the United States House Committee on Taxes and Means introduced a tax bill to reduce tax benefits related to financial mergers and purchases.

On Wednesday, October 14, 1987, the United States Department of Commerce found that higher trade deficit figures had a negative impact on the value of the dollar, raising interest rates and lowering share prices.

The Dow Jones fell by 95.46 points, and the other day fell another 58 points.

On the Friday before Black Monday, the Dow Jones fell by another 108.35 points.

As the Monday came around and the stock market reopened, the Dow Jones fell by 508 points.

It triggered crashes on futures exchanges and options markets and the largest one-day decline in Dow Jones history.

Of the more than 2,000 New York Stock Exchange stocks, 195 saw trading delays and shutdowns throughout Black Monday.

Computers sank with the total volume of business, further delaying orders.

The Dow Jones saw a huge fall

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The Dow Jones saw a huge fallCredit: Getty Images – Getty

What is the Dow Jones Industrial Average?

The Dow Jones Industrial Average, also known simply as the Dow Jones, is the price-weighted stock market index of 30 major companies on the United States stock exchanges.

The Dow Jones was first calculated on May 26, 1896 by Charles Dow, co-founder of the Wall Street Journal and Dow Jones & Company.

He worked with his business associate, Edward Jones, to establish market measurement.



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