The chairman of UBS has told CNBC that the worst thing for investors to do is sell stocks and markets still have room to grow.
This week stocks have tumbled on the back of concerns surrounding global economic growth and rising interest rates. The International Monetary Fund (IMF) warned earlier this week that simmering trade tensions, such as those between the U.S. and China, could lead to a "sudden deterioration in risk sentiment."
The Dow Jones Industrial Average closed 831.83 points lower on Wednesday, posting its third largest one-day fall of 2018. The sell-off in Wall Street quickly spread to global stocks overnight with the VIX (the CBOE Volatility Index), which is a seen as a fear gauge for the market, hitting a six-month high of 24.1 points on Thursday. Meanwhile, Dow Futures pointed to a triple-digit dive ahead of Thursday's open.
Speaking at the IMF-World Bank meeting in Bali on Thursday, UBS Chairman Axel Weber told CNBC's Geoff Cutmore that investor mood has flipped from one extreme to another.
"When I was in Davos the mood in the market was overly-optimistic," said before adding "I think when I look at the markets now, people are on the other side, they are too pessimistic."