London’s inventory market is within the pink once more as we speak and is on the right track to rack up a ninth consecutive day of losses, with merchants spooked by considerations of slowing progress in China and a renewed flare-up of the Greek disaster.
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The market enters correction territory when it falls by over 10%.
Oil prices, which provide a benchmark for commodity growth worldwide due to its value in industry, reached a six-year low of $40.30 per barrel of US crude on Thursday – less than half of the $96.07 price it would have fetched this time last year.
The FTSE 100 has given up its gains made earlier in the year, and is now down nearly 1 percent since the start of 2015. BHP Billiton PLC BLT, -2.47% fell 2.5%, Anglo American PLC AAL, -1.04% lost 1% and Antofagasta PLC ANTO, -1.49% shed 1.5%. Companies such as Royal Dutch Shell Plc and Rio Tinto Group, among the biggest components of the FTSE 100, tumbled more than 18 percent since the gauge hit a record in April. A figure below 50 indicates contraction.
China’s main index in Shanghai was also 4.2% down on Friday, falling below the 200-day moving average for the first time since July 2014.
In 2014, China’s economy grew at its slowest pace since 1990. It dived another 4% on Thursday.
Since June this year, stock exchanges on the mainland have seen extreme volatility, undermining investor confidence and leading to government intervention.
The FTSE correction comes as economists express fears about the robustness of the global economy amid further crisis in China. The index is now hovering just above 6250, down by 1.6pc at 3pm today to trade at 6268. “Many companies and industries depend on the Chinese consumers who are now “disadvantaged” in purchasing power”, he said.
David Madden, of IG, stated: “It was simply Australia that may catch a chilly when China sneezed, however the Chinese language sell-off is way extra infectious than initially thought”. Market sentiment is also subdued ahead of the release of the Fed’s minutes which will be eyed for information about the timing of a future interest rate hike.
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Greece today cleared €3.4bn owed to the European Central Bank, effectively ending the bitter feud dividing the leftist-governed eurozone nation and its European creditors that threatened to force the country out of the euro and sow chaos in the global economy.
