Asian markets mostly fell at the end of another volatile session Tuesday, a day after a global rout that saw trading suspended in Chinese markets and United States and European equities tank.
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US stocks tanked on Monday, the first day of trading in 2016, as fears over China’s economy and Middle East tensions coalesced to spook Wall Street.
The data – combined with the expiration this Friday of China’s measures brought in to curb last year’s share slump – sent Shanghai stocks crashing nearly seven percent.
Steven Sun, the head of Hong Kong and China equity research at HSBC, pointed to a stabilization in the Chinese currency and an injection of liquidity as the reasons for a less tumultuous trading day, noting that the implementation of the circuit breaker probably contributed to the sell-offs on Monday.
At press time (12pm EST), the S&P 500 slid out of negative territory to rise 0.015 per cent while the Nasdaq Composite lost some early gains to fall into the red down 0.13 per cent.
China’s Shanghai Composite, which plunged 6.86 per cent on Monday on worse than expected manufacturing data, fell by as much as 3 per cent on Tuesday, in spite of a spate of share purchases by Chinese government funds meant to shore up prices. In Japan, the Nikkei flirted with positive territory before settling 0.4% lower, while South Korea’s Kospi managed a 0.6% win.
Just as they did this past summer when its markets went haywire, Chinese authorities went on the offensive and took steps to prop markets up.
The market was also helped by statements from at least 30 companies saying their controlling shareholders or senior executives would not sell shares on the secondary market within the next six or 12 months to help stabilise the stock market.
Brokers said the national team led by the China Securities Finance Corporation had poured money to support the markets on Tuesday morning. Saudi Arabia severed diplomatic relations with Iran over the weekend in a dispute over the Saudis’ execution of a Shiite cleric.
U.S. benchmark West Texas Intermediate crude fell 1.2 per cent, to $36.32 a barrel in NY.
Gold prices were up 0.2% at $1,077.70.
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In its statement Tuesday, the stock regulator said the circuit breaker system protects the interests of small investors and that it will be fine-tuned.
