Market sell-off may get 'worse' this week, says analyst

The ongoing equity markets sell-offs across the globe are drawing parallels between with the crash of the late 1980s and could get "significantly worse" this week, BNY Mellon's chief currency strategist Simon Derrick told CNBC on Tuesday.

"Without wishing to be too alarmist, there have been a few parallels to what was happening 30 years ago in terms of what's been happening to the dollar, what's been happening to oil prices, what's been happening to Treasury yields," he said, referring to "Black Monday," which began on October 19, 1987, in Asia before reaching Europe and the United States.

Last week, major markets crashed amid fears of an escalating trade war between the US and China, rising US Treasury yields, geopolitical problems in Italy and concerns over Brexit negotiations in the UK.

While Derrick believed that current events wouldn't play out like they did 1987, but said a "confluence of different circumstances" could lead to a severe risk-off event, leading the market to get "significantly worse this week."

Meanwhile, Hussein Sayed, chief market strategist, FXTM, said the start of this trading week has been "confused and cautious" one for investors.

Asian equity markets fell on Monday and continued to be dragged lower on Tuesday, despite at a slower pace. European stocks recovered slightly but appetite to risk remained limited as a cautious mood continued to dominate US markets which closed in red on Monday.

However, Saudi Arabia’s Tadawul All Share Index (TASI), which fell 4 percent earlier today, recouped losses, moving into the positive territory by midday Tuesday. The benchmark index was up 0.3 percent at 7,590 points at 12.58 pm Saudi time.

"There still seems to be a lot of uncertainty in global financial markets after last week’s steep selling. Investors are also struggling with the ongoing US-China trade war, Brexit talks, Italy’s budget clash with Brussels, and EM slow down," he noted.