Asian and European markets are deep in the red Thursday and USA stock futures are dropping fast: Dow and S&P 500 futures are down by around 2.5%. The Nasdaq declined 104 points, or 2.09 percent.
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The CBOE Volatility Index .VIX , the market’s favored gauge of Wall Street anxiety, was up 14 percent at 23.47, after opening at its highest level since December 14.
Still, investment experts say US investors should remain calm and that China’s market gyrations at this point are unlikely to do any ongoing damage to the USA markets or economy.
Trading was halted in China after a 7 percent drop in the CSI 300 Index of large-capitalization companies listed in Shanghai and Shenzhen amid deteriorating manufacturing data. Another measure, a six-month ban on major shareholders’ offloading stocks in Chinese-listed companies, expires at the end of this week.
The S&P 500 was on track for its worst start to a year since 1928.
Brent (LCOc1) settled down 6 cents at $37.22 a barrel and U.S. West Texas Intermediate futures (CLc1) settled down 28 cents at $36.76 a barrel.
The Nikkei share average ended 0.4 percent lower at 18,374.00, the lowest closing level since October 20. The major averages have fallen sharply in early trading, adding to the losses posted in the final week of 2015. At its low for the day, the Dow was down 467 points and was headed for its worst first-day per centage drop since 1932. Asian markets ended the session lower.
The Canadian dollar traded at 71.61 cents US, down 0.64 of a cent from Thursday’s close before the New Year holiday.
Global stocks plunged on Monday, with the Dow making its worst start to a year since 2008, after weak factory data out of China and the United States.
‘Those are violent New Year fireworks.
Airline, financial, software, and biotechnology stocks are also seeing significant weakness, while gold stocks are among the few groups bucking the downtrend.
Market observers say that the stock falls are mainly attributable to lower oil prices amid the diplomatic standoff between Iran and Saudi Arabia.
Even though the manufacturing report was disappointing, it’s just the latest sign of a slowdown in China. “This is like a replay of the same things that moved the markets in August”. There is some thought, however, that continued volatility could prompt the Federal Reserve to be more cautious in raising interest rates, which the Fed began last month.
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The index of national factory activity is expected to have risen in December, according to the Institute for Supply Management. A reading below 50 signals contraction in domestic manufacturing activity.
