SBS50: Biggest Stories 1987

1987 was marked by a massive loss of wealth across the world when stock markets crashed on October the 19th – a day known as Black Monday. The global crash began in Hong Kong and spread to Europe, also hitting the United States. Australia and New Zealand’s markets were affected a day later.

Stock Market Crash of 1987 (AP Photo/G. Paul Burnett) Credit: AP

American Markets dropped just over 22 per cent in a day, sending the US administration into frenzy.

We shouldn’t assume that the stock market’s excess volatility is over, however it does appear that the system is working.

Ronald Reagan

Australia’s market took a much bigger pounding, losing 41 percent in a single day – we called it Black Tuesday because of the time-zone difference.

By the end of the year, Australian shares had collapsed 50 per cent from their pre-crash highs, while US markets were down 35 per cent.

It took the US stock market just over two years to bounce back but Australian shares did not recover their values until 1994.

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