INVESTORS in Britain and around the world have been sent into panic today after China’s stocks plummeted by 8.5 per cent – the largest one-day fall in almost eight years.
The FTSE 100 was in the red this morning after share indices in the world’s second-largest economy suffered their worst drop since 2007.
The fall in China is part of a wider slump in the country’s stocks that first began in mid-June, amid fears the China’s finance bubble had burst.
Previously China’s indices had almost doubled in the space of just a year.
The country’s Government had managed to briefly calm nerves with a raft of support measures, but today investors appeared to have lost all faith in official efforts to prop up values.
The Shanghai Composite Index is now around a third lower than its peak on June 12 this year, with indices having lost around $3 trillion (£2trn) in value – the equivalent of the UK’s ENTIRE economic output last year.
The crisis poses a huge threat to the British economy and the rest of the world due to the sheer size of China’s economy.
Laith Khalaf, senior analyst at Hargreaves Lansdown: “The Chinese stock market has suffered one of its blackest days ever, vividly demonstrating that what goes up fast tends to come down at a similar pace…
“In the near future we can expect more thrills and spills from the Chinese stock market.
“The bubble that has built up over the last year from domestic investors trading on margin finance may yet have further to unwind, and the Government’s interventionist response to falling stock prices will have troubled many international investors.”
• Who should be most worried?
Overall, the biggest concerns are for Asian economies. Australia, Brazil, Canada, Chile and Peru depend on demand from China for vital commodities for industry. In manufacturing, Hong Kong, Korea, Malaysia, Singapore and Taiwan are most exposed, according to Jeremy Lawson, chief economist at Standard Life Investment.
Full article: Panic as China suffers ANOTHER stock market crash with largest shares fall in EIGHT years (Express)