The European sell-off followed China’s stocks plunge, the most since 2007, as government support measures failed to tame investor concern that a slowdown in the world’s second-largest economy is deepening.
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Over the past week, China’s benchmark Shanghai Composite fell 12 percent, adding up to a 30 percent drop since the middle of June. READ ALSO: Sensex crashes over 1,200 points; investors lose over Rs 3 lakh crore Investors’ concerns over China’s economic slowdown and a souring view of once-favored emerging economies have rattled financial markets around the world in recent days, and showed no signs of letting up on Monday.
Small investors have suffered heavy losses, souring many on stock ownership and threatening to disrupt Communist Party plans to use the market to raise money for reforms of state industry. A big reason for the stock market rally was that a lot of ordinary Chinese people began investing in the stock market for the first time.
There is also the issue with crude oil, which is going on a nine-week streak of being significantly lower than previous times. (CSF) to buy stocks on behalf of the government. A Bloomberg index of total returns on commodities fell to its lowest level since 2002. Contracts for September settlement fell 9.3 per cent to 3,158, 124.11 points below the current value of the underlying index, while most other index futures, including those tracking the CSI500 and the SSE50, were down the 10 per cent daily limit.
LONDON, August 24 (Reuters) – European stocks slumped on Monday following a rout in Chinese markets, wiping hundreds of billions of euros off leading shares and sending one benchmark index to a seven-month low.
The decline threatened to weigh anew on global markets after last week’s Chinese losses triggered a worldwide selloff. For starters, analysts have long wondered about the accuracy of government economic statistics.
The slide was region-wide because so many Asian economies are closely tied to China’s.
“The multi-year low in the PMI (purchasing managers’ index) confirms that the economy is still not on a solid footing and (we) look for a flat growth profile in H2, with continued downside risks”, Barclays Bank said in a research note.
Minutes from the Federal Reserve’s July meeting last week revealed policymakers want to see further improvement in the labour market and inflation before raising interest rates for the first time in almost nine years.
Earlier this month, the Chinese central bank devalued the yuan in an attempt to boost exports.
In currency trading, the dollar was at 119.99 yen on Monday, down from 122.05 yen on Friday.
Fortescue shares were down by more than 10 percent on the weak results. The Malaysian ringgit fell to a fresh 17-year low against the U.S. dollar and led losses.
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Taipei recorded its biggest-ever intraday drop, at 7.46 percent, while regional markets also slumped, including Tokyo’s Nikkei 225 falling 3.21 percent.
