Yes, stocks in China posted their largest daily drop in eight years on Monday.
The benchmark Shanghai Composite Index slipped 1.0 percent, or 37.08 points, to 3,688.48 by the break.
Stocks fell across the board on Monday, with 2,247 companies falling, leaving only 77 gainers.
So, why should investors in the U.S. care? The Shanghai market benchmark closed 1.7 per cent lower.
The announcement was made to dispel ‘rumours that the national margin trading service provider has backed off from stabilising the stock market, ‘ Xinhua said, citing a spokesman for the China Securities Regulatory Commission, Zhang Xiaojun.
He added it would take some time for trading to become less volatile.
About 1,700 stocks fell the maximum 10 per cent allowable in any single day, including China Life Insurance, Shenhua Energy and Bank of Communications.
“Big caps like banks are rising as undoubtedly, the state funds are buying them to prop up the broader market”.
Faced with global declines in stock prices, investors moved into traditional safe havens.
The Chinese sell-off ruffled other markets in Asia, though the scant amount of foreign investment in Chinese shares limits the ripple effects outside of Hong Kong, a semiautonomous Chinese territory that is also a financial center.
An absence of late-night measures after such a big crash is unnerving retail investors, said Castor Pang, head of research at Core-Pacific Yamaichi Hong Kong. Global economic growth concerns remain the focus for investors. In other words, relatively few Chinese have been affected by the share market falls. Australian shares fell 0.9% and South Korea’s Kospi shed 1%.
EUROPE and the U.S. A closely watched Chinese purchasing manager’s index fell to a 15-month low over the weekend, with analysts blaming the drop partly on the market.
Share indices in Frankfurt and Paris tumbled more than 2%, while London’s FTSE 100 was off nearly 1%. Expectations are split between September or December.
This was given the persistent sales of commodities and speculation ahead of the United States Federal Open Market Committee meeting to take place later this week, which could offer more direction on the interest rate hike.
Fiat Chrysler fell 4.8 percent at $14.42 after a U.S. auto safety watchdog announced a $105 million fine against the automaker over lapses in its safety recalls.
“Unknown to most Americans, some of those shuttered stocks on the New York Stock Exchange were Chinese stocks and among the largest capitalized companies in the world”. The euro topped $1.11 for the first time in two weeks, boosted further by strong German business sentiment data.
Its Statistics Bureau yesterday turned in a disappointing 0.3 per cent drop in industrial corporate profits last month, after preliminary figures on Friday showed that China’s manufacturing sector slumped to its lowest in 15 months in July.