Chinese market chaos rooted in long-held but sporadically-acted-on fears of economic malaise, negative US manufacturing data and instability in the Middle East combined to create an unfortunate grab bag of reasons for traders to sell.
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That grim news sent markets south. After European markets sold off, the Dow dropped as much as 467 points before recovering a little and ended the day off 276 points.
In individual stock news, Next’s share price has shed 5.01 percent to 6,830.00pafter the retailer’s trading update fell short of expectations. “We’ve been through this before with China – they’re in the process of changing their economy, you’re going to have ups and downs with that and it’s going to keep happening”. It expects adjusted profit of 39 cents to 41 cents a share.
Earlier in Asia, China’s Shanghai Composite Index finished down 0.3 percent at 3,287.71 after wavering between gains and losses.
The STOXX Europe 600 Basic Resources index rose 1 percent, the top sectoral gainer, as prices of key industrial metals rose after slumping in the previous session.
The Chinese stock market stabilized in Tuesday’s trading after a fall at the opening. Chinese stocks plunged on Monday, with the large-cap CSI 300 Index plummeting 7.02 per cent, triggering a trading halt.
Markets around the world seem to have taken their lead from China and all are trading lower, currently. The heavyweight German index DAX gained 0.3 per cent. The yen climbed to its strongest level since April against the euro and hovered at its highest since October versus the United States dollar.
A trader works on the floor of the New York Stock Exchange shortly after the market opened in New York September 1, 2015.
In currencies, the dollar slipped to 119.09 yen from 119.43 yen on Monday.
Ford fell 2.6 percent after December sales came in about 4,000 short of the Edmunds.com forecast of 243,590. Anything lower than 50 indicates that the market is contracting, but this figure was even weaker than analysts had feared, and it had an impact on the price of basic materials.
Chinese shares continued to drop on Tuesday, following the biggest loss in nine years on Monday and denting the FTSE All World index. Over the weekend, Saudi severed diplomatic ties with Iran in a dispute over the Saudis’ execution of a Shiite cleric.
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The Caixin/Markit China Manufacturing Purchasing Managers’ Index (PMI), fell to 48.2 in December, from 48.6 in November, the 10th straight month of contraction.
