Stock markets plunge on more fears over China
This followed an 8.4% plunge in the Shanghai Composite to 3,211.75 points, extending last week’s losses.
China attempted to stem the loss over the weekend by announcing it would allow its main state pension fund to invest in the market.
However, panic spread to other markets with the Hong Kong Hang Seng dropping 4% to 21,523.57 points in early trade. The Nikkei in Japan was down 2,8%.
Over the past week, the Shanghai has lost 12%, adding up to a 30% drop since the middle of June.
The Dow Jones in the US has lost 6%, while the FTSE 100 posted its biggest weekly loss this year of 5%.
Earlier this month, the Chinese central bank devalued the yuan in an attempt to boost exports.
Economists are now trying to calm the markets. The International Monetary Fund said China’s economic slowdown and fall in equities was a correction and not a crisis.
“It’s totally premature to speak of a crisis in China”, Carlo Cottarelli, IMF executive director said, pointing out that this was a slowdown in the economy and not a slump. China will expand at 6.8% this year, below the 7.4% growth achieved in 2014.
The mining sector led the fallers, dropping 9 percent to its lowest level since 2009 as fears about China’s economic slowdown continued to bludgeon commodity prices. Glencore and Anglo American fell to fresh all-time lows.
UTV Media was only stock to outperform, gaining almost 2% after saying it was in talks to sell its television assets.