Black Monday - Stock Market Crash  

Black Monday refers to 19th October 1987, when share prices in New York, London and around the world fell by upto 25% in one day. The bear market lasted for a week and many feared this heralded a coming recession. But, the depression never materialised and stock markets recovered.

Causes of Black Monday 1987

It is hard to pinpoint the exact causes of black monday as it appears to be mainly non economic factors such as:

  1. Market sentiment and herding behaviour
  2. Use of complex derivatives
  3. Overvaluation
  4. illiquidity
  5. Program trading - automatic trading by computers which react to certain data.

Effect of falling share prices on the economy

Related Essays and Revision Notes

Black Monday at Wiki pedia for timeline and graphs