European stocks tumble on fresh China worries

GMT 14:19 2015 Monday ,24 August

Arab Today, arab today European stocks tumble on fresh China worries

European stocks
London - AFP

European stock markets slumped further in opening deals Monday in a fierce global selloff on mounting worries over the impact of China's slowing economy.

The latest heavy losses, extending last week's worldwide rout, came as Shanghai suffered another dizzying plunge despite Beijing's latest market intervention.

London's benchmark FTSE 100 index of top blue-chip companies dived 2.62 percent to 6,025.27 points at the open, driven also by low volumes.

Frankfurt's DAX 30 sank 3.15 percent to 9,805.72 points, sliding under 10,000 for the first time since January, and the Paris CAC 40 shed 3.57 percent to 4,465.48.

Elsewhere, Madrid stocks plunged 2.06 percent, Milan shed 2.80 percent, Zurich was down 2.72 percent and Lisbon tanked by more than four percent in value.

In Asia, the Tokyo stock market also lost more than four percent to finish at a six-month low, after Shanghai had nosedived by 8.49 percent.

Oil prices also fell further after sliding below $40 a barrel before the weekend for the first time in six years.

"China’s contribution to a potential global slowdown has unsettled markets again this morning," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers.

He added that the downward move was "exacerbated by light volumes as the City (London's financial district) waits to return to full strength at the end of this holiday month."

Shanghai shares collapsed on Monday as Beijing's latest intervention failed to restore confidence, with concern mounting about the stalling economy.

The benchmark Shanghai Composite Index closed down 297.83 points at 3,209.91 points, after falling as much as nine percent during trading.

Tokyo's Nikkei index was also swept lower as worries deepened about China's economy.

The Nikkei 225 entered a correction as it dived 4.61 percent, or 895.15 points, to end at 18,540.68 -- its lowest point since February.

In the latest move at the weekend, China said it will allow its huge state pension fund to invest up to 30 percent of its assets in stocks.

The market regulator has also issued reassurances that the CSF will continue to soothe market volatility for several years, although that has not been enough to reassure investors.

"The latest move by the People's Bank of China saw the central bank announce that local government-managed pension funds will be able to invest in the markets for the first time, in an attempt to pour billions of yuan into an equity market that is currently drowning in losses," said Spreadex analyst Conor Campbell.

"However this move only inspired panic not peace, and the fervent selling -- with investors fleeing in droves -- infected the Western indices from the moment the (opening) bell rang," he added.


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