On Monday, the commission denied that the national margin trading service provider has backed off from stabilizing the stock market, as had been rumored. The Dow is down 2 percent, and the tech-heavy Nasdaq is up 6 percent.
The losses build on an 8.5% decline on Monday for the benchmark Shanghai index, its worst performance in eight years. However, the market crash in the world’s second largest economy is unlikely to hurt global investors, observe some analysts.
The common European currency has recently tended to rise at times of market stress.
China’s Politburo, a decision-making body of the Communist Party, promised to step up targeted adjustments of economic policy to foster stable growth, local media said on Thursday.
After a severe fall of over 8 percent on Monday in the Shanghai Composite index, which wiped off over $600 billion in market value, the country’s securities regulator announced that it would probe malicious share “dumping” and promised to buy more stocks in order to calm the market.
Chinese shares slumped nearly 8.5 percent on Monday, their biggest fall in a single session since February 2007, after weak economic data revived fears about the health of the world’s second-largest economy.
The Hang Seng index fell 0.5 percent, to 24,497.98 points, while the China Enterprises Index slid 1.2 percent, to 11,137.33 points, the lowest close since July 8.
Government measures lasted just three weeks, now how long can the Hong Kong property market stand up to Chinese share volatility?
“There is also uncertainty about how the government support measures will exit the market”, he said.
As the Asian stocks recover before Fed meeting, global investors shrug off turmoil in Chinese market viewing the swings as common to China and other small and emerging markets.
In fact we expanded on that conundrum in this post discussing the exposure of U.S. automakers to the Chinese slowdown … The S&P 500 is still up about half a percent for the year.
THE QUOTE: “With Chinese markets heading further south on Tuesday after yesterday’s plunge, the question whether Beijing’s intervention is working gets louder”, said IG market strategist Bernard Aw in a commentary. However, West Texas Intermediate crude was up 74 cents at $48.13 US a barrel on Tuesday and Brent oil, the most common worldwide contract, rost 23 cents at $53.70.
Traders were turning attention to the U.S. Federal Reserve as they try to assess when interest rates will be raised. Expectations are split between September or December.