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Komfie Manalo, Opalesque Asia:

The equity sell-off on February 5 was a correction and not a bear market because it does not show any signs of systemic risk and the contagion to FX, commodity or money markets appears limited as well, said Lyxor Asset Management .

Jeanne Asseraf-Bitton, global head of Lyxor's Cross Asset Research said she expects a limited spillover effects on the real economy from the recent market moves.

She said, "In the aftermath of last Monday's sell-off, equity markets fell anew on Thursday with the S&P 500 down 3.75%. U.S. stocks entered the typical correction zone with a 10% drop from the peak reached on 29 January 2018. Anecdotal evidence suggests that unlike Monday when systematic strategies were apparently the main sellers, the drop could be largely attributed to active investors cutting risk."

Reasons for sell-off

Asseraf-Bitton cited several reasons for the sell-off including the re-pricings of central bank policy normalization and inflation prospects amid firming wage pressures. She noted that while the fundamental backdrop is shifting, it should remain conducive to equities.

"Central banks gradually withdrawing their support and liquidity becoming less plentiful continued to hit richly valued assets. BoE's governor Carney noted on Thursday that 'it will be likely to be necessary to raise interest rates to a limited degree in a gradual process but somewhat earlier and to......................

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