A Chinese stock investor sits in front of computer terminals at a brokerage house in Qingdao in eastern China’s Shandong province Thursday, Jan. 7, 2016. Apple, the world’s largest publicly traded company, dipped 3.5 percent and touched its lowest price since September 2014.
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German stock traders watch as the market is rattle by Chinese volatility.
Asian shares rebounded on Friday, led by strong gains for battered Chinese stocks after China suspended its market circuit breaker system and set a firmer midpoint rate for yuan trading for the first time in nine days. The CSI 300 blue-chip index was up about 1.7 percent, while the Shanghai Composite Index was up about 1.3 percent.
Government measures introduced previous year to prop up share prices after a meltdown in June are being gradually withdrawn while investors are also unnerved by possible signs China’s economy is in worse condition than thought. An ill-thought-out “circuit breaker” trading halt system, which kicked in twice this week, also added to volatility.
Regulators suspended the “circuit breaker” rule late on Thursday.
Hong Kong’s Hang Seng index was up 1.1 percent to 20,568.58, while Japan’s benchmark Nikkei 225 index rose 0.4 percent to 17,836.90.
“We do not think that China will let the move get out of control and would prevent a sharper move or any panic in global markets”, argued Barclays.
Earlier Thursday, Beijing’s securities regulator cut off trading just 14 minutes after business opened as the Shanghai Composite Index fell more than 7 percent.
Thursday’s losses mark one of the worst starts to a trading year for decades as nerves are shredded by a ideal storm of weak global growth – particularly in China – a slump in oil prices to more than 11-year lows and geopolitical tensions.
Some investors are blaming the commission for developing the circuit-breaker rules.
Worries about growth in China and elsewhere are also hurting oil prices, as investors bet that less economic growth will cut demand for energy.
Chinese stocks and the yuan rose in early trading Friday in a respite from their early year meltdown, after authorities overnight removed a controversial mechanism that was blamed for triggering a stampede that has wiped $1.1 trillion off mainland stock markets this week.
Aerospace giant Boeing fell $5.82, or 4.2 percent, to $133.01, and freight railroad Union Pacific felt $1.75, or 2.3 percent, to $73.08.
The sell-off came as Chinese stocks fell again after the People’s Bank of China set the yuan’s daily reference rate at the lowest level since April 2011.
The health of China’s economy has big implications for countries all around the world even though the US economy is doing fairly well and Europe’s economy looks healthier.
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The reverberations from these events have been felt throughout global stock markets, and the United Kingdom is no exception. On Thursday, the contract lost 70 cents to $33.27. That helped send copper producer Freeport-McMoRan down 56 cents, or 9.1 percent, to $5.61. The dollar rose to 118.41 yen from 117.74 yen.
