Global stocks plunge further on China woes

Subscribe to Oneindia News

London, Aug 24: Major European and Asian stock markets slumped and commodity prices hit new lows today as a Chinese-led rout spread globally, fed by fears of a damaging slowdown in the world's second-largest economy.

Chinese stocks have tumbled since peaking in mid-June and authorities have launched broad interventions to try to restrain the drops, but Beijing's latest market intervention has failed to restore confidence. China-linked shares again led the stocks sell-off, with Shanghai closing down 8.49 per cent, the biggest daily loss since February 27, 2007.

China woes: Global stocks plunge further

"The fog of fear over the state of the Chinese economy is only thickening, and with little in the way of non-Chinese news to come this Monday, the markets are going to struggle to escape today without some fairly ugly scars," said Connor Campbell, Spreadex financial analyst.

In Europe, Frankfurt's blue-chip DAX 30 index hit an intraday low of 9,593.40 points in early afternoon trading, a drop of 5.25 per cent from the previous closing level on Friday.

The CAC 40 in Paris sank briefly more than 5.0 per cent before settling at a loss of 4.80 per cent, while London's benchmark FTSE 100 index of leading companies fell 4.47 per cent.

"Things are probably going to get worse before they get better," Nader Naeimi, head of dynamic asset allocation at AMP Capital Investors in Sydney, told Bloomberg News. "You really need rate cuts and more policy easing in China. In the meantime, things can get worse."

Falling oil prices also weighed on market sentiment as they slid below USD 40 a barrel for the first time since 2009, after weak Chinese manufacturing data deepened fears that the Asian giant is growing more slowly than thought. Global equities have lost more than USD 5 trillion since China's shock currency devaluation on August 11.

"We're following the situation in China very closely. However, the concrete fallout for the German economy is likely to be limited," a government spokesman for Europe's biggest economy told reporters in Berlin.

Other European markets that dropped more than 4.0 per cent by early afternoon included Amsterdam, Brussels, Milan and Madrid, and Oslo's commodities heavy index nosedived 6.02 per cent. Russia's ruble also hit a new 2015 low and stocks sank, battered by falling oil prices and the impact of sanctions over Ukraine.

Data on Friday showing Chinese manufacturing activity slowed to a 77-month low had added to the gloom, signalling that even a campaign by Beijing with its vast arsenal of reserves has not been able to stimulate growth.


Please Wait while comments are loading...