“But (they) run the risk that this will entail so many impediments to free trade that index providers and foreign investors will be discouraged from entering the market for a long time”.
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Chinese stocks swung wildly on Thursday as Beijing took new measures to avert a crash after mainland markets plunged more than 30 percent over the past month, wiping trillions of dollars off values.
The yen retreated, allowing the greenback to rise above 122 yen from a seven-week low mid-week.
“Greece and China have been at the forefront of investors’ minds right now, although China is the bigger factor simply because of its size and its role as a global market player”, said Ninh Chung, head of investment strategy and portfolio management at SVB Asset Management in San Francisco.
Cautioned stirred by the Federal Reserve’s minutes on Wednesday had weakened the dollar.
MSCI’s all-country equities world index lost 0.8 per cent, while the Dow Jones industrial average fell 179.48 points, or 1.01 per cent, to 17,597.43.
The dollar was up 0.56 per cent against the yen at 121.38. The yen rose to a six-week high against the dollar. The FTSE 100 index of leading British shares was 1.4 percent higher.
Dealers are also tracking events in Europe after Greece was given a Sunday deadline to come up with a bailout reform plan acceptable to its creditors or face ejection from the eurozone. The S&P 500 gained 16.2 points, or 0.79 per cent, to 2,062.88 and the Nasdaq Composite added 46.97 points, or 0.96 per cent, to 4,956.73.
The rebound in China sapped this week’s gains by the Japanese yen, which tends to gain when markets turn risk-averse, and helped boost uneasy commodity markets. This week is shaping up to be the worst for crude since March.
“Also, the ripple effect from the market correction has yet to show up”, wrote Bank of America Merrill Lynch analysts in a note.
Gold rose 0.4 per cent to United States dollars 1,163.59 an ounce. The metal sank to US$1,010.26 on Wednesday, a six-year low.
Falling to €1035 per ounce as the single currency rose on the FX market, the gold price in Euros broke below its tight €20 range of the last 6 weeks. It was unmoved by the Bank of England’s widely expected decision to keep its benchmark rate at a record low 0.5 percent. Oil prices, however, bounced back from a three-month low as the Iran nuclear talks failed to produce a deal.
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In the July update to its World Economic Outlook, released Thursday, the Washington-based lender forecast 3.3 percent global growth for this year, which is smaller than the 3.5 percent predicted in April.
