European stock markets are falling fast as further concerns about China spook investors
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Last week’s horror show on the markets is continuing. Stocks across Europe, the US and Asia are taking a hammering as investors' concerns about China's show no signs of letting up.
The US markets have just opened and are down massively. The Standard & Poor's 500 index and the Dow Jones industrial average plunged more than 5 per cent. The Nasdaq was down more than 8 per cent.
The meltdown, which has erased nearly $10 trillion from the global stock market since a peak on June 3rd, poses a serious challenge to central banks.
Welcome to our markets blog. I’m Eoin Burke-Kennedy and I’ll be steering ship for the rest of the day.
15:26For those coming fresh to the story, another collapse in Chinese stock values started the ball rolling this morning. Chinese stock markets suffered their biggest one-day drop since the financial crisis. This spurred huge sell-offs in global equities and commodities, with more than €400 billion wiped off Europe's FTSEurofirst 300 share index.
Here's a snapshot of European bourses -
London FTSE (-5%)
Germany's Dax (-5.2)
France's Cac 40 (-6.1%)
Dublin Iseq (-6.35)
Apocalyptic sell-off or withstandable contraction?
Philippe Gijsels, head of research at BNP Paribas Fortis Global
Markets in Brussels, said there was no sense that an apocalyptic sell-off was at hand, with the United States and European economies able to withstand a bout of turmoil. "We see this as a very nasty correction," he said, "not the start of a new bear market."
15:35The falls of the last few trading days have been significant and will be a knock to investment and pension funds, as well as those with direct market holdings. The commentary internationally now breaks down into two broad camps. Read Cliff Taylor's take on the current turmoil.
15:39A gauge of stock-market momentum in Hong Kong is showing the most extreme selling since the Black Monday crash of 1987.
15:40Cliff Taylor writes: After the scariest opening seen on US markets in a long time, things seem to have stabilised a little, even though all major markets are still well in negative territory. What happens on Wall Street after Europe closes is going to be very important now, as well - of course - as developments overnight in Asian markets and China in particular. This one still has a way to run, I would think.
15:43Euro shoots to six-month high against dollar
The frantic dash to safety has pushed the euro to a six-and-a-half month high against the dollar - above $1.15. It briefly shot to as high as $1.17
Oil prices reflect fear for global economy
Investors are spooked that a contraction in China could spark a global slowdown. Perhaps one of the biggest indicators of this worry can be seen through the prism of oil prices. A global economic contraction would drastically hit oil consumption at a time of plentiful supply.
Amidst crashing share values, Brent oil today hit an intra-day low of $42.51 a barrel, down 6.5 per cent, or $2.95, from Friday's close. US light crude was down $1.93, or 4.8 per cent, at $38.52 a barrel, after falling as low as $37.75, down 6.7 per cent on the previous close and its weakest since February 2009.
Steep losses last week led to the contract's longest weekly losing streak since 1986.US crude is now more than 17 per cent below its opening price at the start of the month and Brent is down more than 16 per cent.
On the Dublin market, Iseq heavyweights CRH, Ryanair, Smurfit Kappa are getting a bloody nose. They’re all down 4-6 per cent on the day. There is nothing company specific about any of this. It’s in line with what’s happening elsewhere.
Trump plays the Cassandra on Fox News
As China's stock-market plunge spread to the US, presidential candidates on Monday laid on blame and pushed their policy ideas from the sidelines, with Republican Donald Trump saying he had warned about US exposure to China.
"I've been talking about China for years. Because China's going bad it's going to bring us down, too, because we're so heavily coupled with China," said real-estate mogul Trump on Fox News. "I'm the one that says you better start un-coupling from China because China's got problems."
Dow Jones plummets 1,000 points on China crisis
Dow Jones industrial average lost more than a 1,000 points in volatile trading earlier following a steep drop in Chinese shares and a selloff in oil and other commodities.
To put this in perspective, the Dow, which is now down about 325 points, has never lost more than 800 points in a day.
European rout halts as markets close
The bloodbath has stopped, albeit temporarily. Markets around Europe have close for the day. The pan-European FTSeurofirst300 is down 5.4 per cent. Most markets are down between 5-6 per cent on the day.
Dow plunges over 1,000 points four minutes after opening, or about 6%. Fears about China's economy and markets grip US investors.— CNN Breaking News (@cnnbrk) August 24, 2015
There's no rational choice anymore:
"Today everyone seems to be selling off, and there's panic, there's no rational choice anymore, no rational reaction," according to Michael Woischneck of Lampe Asset Management GmbH,
European markets suffer worst day since 2008
It’s official, European stocks just had their worst day since 2008, with Germany's benchmark gauge entering a bear market.
All but three shares in the Stoxx Europe 600 Index fell as the gauge deepened its plunge after its worst week in four years.
It slid 5.3 percent, earlier losing as much as 8.1 percent, with miners leading the plunge in industry groups as commodities headed for their lowest levels since 1999.
Germany's Dax index sank 4.7 per cent, down 22 percent from its peak. The rout that began with the devaluation of China's currency has sent the Stoxx 600 into a correction on Friday. It closed today 17 per cent below the record in April.
Seventeen out of 18 western- European markets have fallen 10 per cent or more from their high, and the volume of Stoxx 600 shares changing hands was more than double the 30-day average on Monday.
The UK's FTSE 100 Index closed at its lowest level since 2012 and dropped below 6,000.
Dublin followed suit with the Iseq closing down 294 points or nearly 5 per cent.
US stocks halt mass global sell-off
US stocks appear to be turning the tide, pulling back from the mass sell-offs of earlier. The Standard and Poor's 500 Index just reached a level equivalent to a correction, as Apple rebounded and investors assessed if a global rout had gone too far.
The Dow Jones Industrial Average dropped 1,000 points and the S&P 500 was down more than 10 per cent from its May record in the opening minutes of trading. The equity gauges cut those losses by more than half within the first hour. Apple gained 2.3 per cent after earlier slumping 13 per cent.
The S&P was down only 1 per cent to 1,951.59 this evening in New York, after earlier dropping as much as 5.3 per cent. The Dow lost 142.31 points, or 0.9 per cent to 16,317.44 after losing 6.6 per cent.
17:52Word from the floor: "Every order has been a sell today, across the board, so clearly people think we haven't hit the bottom yet."
Markets slump as world realises main growth engine in hands of incompetent, secretive police state that thinks it can dictate equity prices— Paul Mason (@paulmasonnews) August 24, 2015
Currency shifts - problematic for Irish exports
From an Irish export perspective, the strengthening of the euro is a worrying development. The dollar dropped to a seven-month low against the euro while sterling also fell.
The dollar fell 1.6 per cent to $1.1567 per euro earlier in New York, after falling as low as $1.1714, the weakest since January.Sterling, meanwhile, was down by two cents against the euro at slightly below 1.36.
Traders are betting that woes in China made the chances of US, UK rate hikes less likely.
18:12The pan-European FTSEurofirst 300 ended 5.4 per cent lower, wiping roughly €450 billion off its total market capitalisation - its worst daily closing performance since November 2008. The index was down 7.8 per cent at one point, its worst intraday loss since October 2008, just after the demise of US investment bank Lehman Brothers.
18:20We'll have to leave it there for today...
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