Chinese stocks nosedived on Thursday, triggering the second daylong trading halt…
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The official Xinhua News Agency said China halted trading on the Shanghai and Shenzhen stock markets after shares tumbled.
The Dow Jones industrial average fell 10 points, or 0.1 percent, to 17,139 as of 11:08 a.m. Eastern time Tuesday. The S&P 500 and Nasdaq Composite were on track for worst opening day finish in 15 years.
The price of oil plunged to its lowest level since 2008 on the prospect that global demand could fall further.
The sell-off came after China allowed its currency to weaken further, a unsafe omen for the world’s second-largest economy.
“The management of the Chinese economy is the real concern”, said John Canally, chief economic strategist at LPL Financial.
CHINA FEARS: Asian stocks traded lower, but selling mostly abated as China’s stock market was more stable. The stock has fallen 38 percent since the outbreaks began in October.
The greenback surged 1.3 per cent to US$0.7184 per Australian dollar, the latter hit by the threat China’s continued slowdown poses for Australia’s key ore exports.
Shares fell $13.95, or 3.1 percent, to $435.08. At one point it was down 442 points, or 2.6 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan lost 1 percent.
European markets also dropped.
OVERSEAS: Germany’s DAX was down 0.1 percent while France’s CAC-40 edged up 0.1 percent.
USA crude plunged to its lowest level since February 2004.
Brent crude oil LCOc1 fell to $33.09 a barrel, its lowest since June 2004. Nonetheless, trading activity was relatively subdued, with many traders away from their desks on New Year’s Eve. The stock dropped $5.72, or 10.1 percent, to $51.02. The contract fell 79 cents, or 2.1 percent, to settle at $35.97 a barrel on Thursday as demand appeared to weaken because of large global stockpiles.
Both the dollar and yen attracted bids amid the risk aversion that gripped financial markets globally from the start of 2016.
“Because of the slump in the Chinese market, more people sold off their shares”, Lee Kyung-min, a researcher at Daishin Securities, said. That helped knock the price of oil lower since China, the No. 2 global economy, is a major consumer of energy. Marathon Oil declined $1.02, or 8 percent, to $11.74 and Murphy Oil shed $1.81, or 8 percent, to $20.78. Silver rose 36.8 cents, or 2.6 percent, to $14.344 an ounce.
One-year NDFs are settled against the midpoint, not the spot rate, and now that the trading band has been widened to 2 percent in either direction, corporates are much warier of using the NDF to hedge given the basis risk inherent in them. The euro firmed 0.4% to $1.09.
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The euro rose to $1.0918, up from $1.0861 on Thursday, while the pound climbed to $1.4771 from $1.4736.
