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Global Stocks Tumble Further Amid Doubts About China
Global stocks on Monday picked up where they left off last week, with markets falling sharply in Europe and Asia, led by another big sell-off in China.
Investors' concerns over China's economic slowdown and a souring view of emerging economies have rattled financial markets around the world in recent days, and showed no signs of letting up.
Commodities also suffered. Futures for Brent and United States crude oil fell to their lowest point in more than six years on concerns about possible weaker demand from Asia amid a general oversupply.
In China, the benchmark Shanghai composite index closed 8.5 percent lower, erasing all of the gains it had made in an extraordinary run-up this year.
In Europe, stocks fell sharply at the open. The Euro Stoxx 50, a barometer of eurozone blue chips, dropped 2.1 percent in midday trading, while the FTSE 100 in London fell 2.22 percent and the DAX in Germany fell 2.15 percent. The overall decline took the broad European market down to its lowest level since mid-January.
Trading in Standard & Poor's 500 futures indicated that Wall Street was headed for a downturn at the opening bell in New York. The S. & P. 500 fell 3.2 percent on Friday.
In the oil market, futures contracts for West Texas crude slid 3.5 percent to $39.04 a barrel, while contracts for the European benchmark Brent crude fell 3.7 percent to $43.80 -- its first time below $45 since March 2009.
Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels, said the danger posed by the China crisis to developed economies was illustrated by the news that companies like Volkswagen and General Motors were slowing production in China, while the countries that depend on commodity exports were being hurt by the Chinese central bank's currency devaluation.
Still, Mr. Gijsels said, there was no sense that an apocalyptic sell-off was at hand, with the United States and European economies considered strong enough to withstand a bout of turmoil.
"We see this as a very nasty correction,'' he said, "not the start of a new bear market."
[Source: By David Jolly and Neil Gough, The New York Times, Paris, 23Aug15]
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