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Asian stock market rout continues after short-lived rally – live China's stock market rout continues as shares dive again – live
(35 minutes later)
4.31pm AEST07:31 8.05am BST08:05
European shares rally after Monday's rout
Here we go again....
The FTSE 100 index has jumped by 102 points at the start of trading in the City, a gain of 1.7%, taking it back over the 600 mark.
Other European markets are also rallying, with France and Germany up 1.7% and Italy gaining 2%.
That recovers some, but not all, of yesterday’s rout which wiped around 4% off the main indixes.
And there are still fears that Europe’s fragile recovery will be knocked hard by China.
Augustin Eden of Accendo Markets explains:
Steep slides in equity markets and fears of a China-led slowdown in emerging economies are upending hopes in much of Europe that strong global growth and a weak euro would boost the region’s limp recovery.
7.56am BST07:56
European stock markets open in a few minutes.
The FTSE 100 is expected to rally, after shedding 288 points yesterday in its biggest one-day slump since 2009.
FTSE100 being forecast to open +75 at 5974.
7.46am BST07:46
China’s benchmark stock market is being dragged deeper and deeper down, wiping 7.5% off the Shanghai composite index as more traders throw in the towel.
Almost every share price has been hit today:
7.41am BST07:41
“The recent turmoil has left even the most hardened trader gasping for air. And there’s probably more to come.”
So warns Frederic Neumann, HSBC’s co-head of Asian economics research, in a note to clients.
He says investors are spooked by two factors -- China’s faltering economy, and the possibility that the US central bank, the Fed, raises interest rates this year.
That puts further cracks into the two main growth pillars for the world economy of recent years: Chinese demand (including commodities) and easy money,”
(via Reuters)
Updated at 7.41am BST
7.37am BST07:37
Today’s rout across the China markets shows that traders realise Beijing won’t, or simply can’t, prop up share prices.
“It’s panic selling and an issue of confidence,” Wei Wei, an analyst at Huaxi Securities Co. in Shanghai, told Bloomberg.
“The government won’t step in to rescue the market again as it’s a global sell-off and it’s spreading everywhere now. It’s not going to work this time.”
7.31am BST07:31
It’s all looking rather ugly on the Chinese markets right now, as the stock market suffers more heavy losses.It’s all looking rather ugly on the Chinese markets right now, as the stock market suffers more heavy losses.
The Shanghai Composite index just fell through the 3,000 point mark for the first time since December 2014, as another wave of selling rips through the country’s brokerages.The Shanghai Composite index just fell through the 3,000 point mark for the first time since December 2014, as another wave of selling rips through the country’s brokerages.
Not that it’s easy to sell shares right now. Trading in scores of companies have been suspended, after they fell by 10% -- the maximum allowed in one day.Not that it’s easy to sell shares right now. Trading in scores of companies have been suspended, after they fell by 10% -- the maximum allowed in one day.
BREAKING: Bye-bye! Shanghai benchmark index sinking nearly 7%, breaking psychologically important 3,000 points level pic.twitter.com/1YvVR4JhWFBREAKING: Bye-bye! Shanghai benchmark index sinking nearly 7%, breaking psychologically important 3,000 points level pic.twitter.com/1YvVR4JhWF
Updated at 4.31pm AEST Updated at 7.31am BST
4.26pm AEST07:26 7.26am BST07:26
The Australian market has closed up. The main S&P ASX200 benchmark finished 2.42% higher at 5,122.4 driven by the financial sector.The Australian market has closed up. The main S&P ASX200 benchmark finished 2.42% higher at 5,122.4 driven by the financial sector.
As Angus Nicholson at IG put it, the bargains were just too good to resist.As Angus Nicholson at IG put it, the bargains were just too good to resist.
The buying opportunities in the ASX today were clearly far too tempting. Banks led the rise today, with the sector up over 4%.The buying opportunities in the ASX today were clearly far too tempting. Banks led the rise today, with the sector up over 4%.
4.16pm AEST07:16 7.16am BST07:16
Ouch. Japan’s main stock index, the Nikkei, has just closed at its lowest level in six months, shedding almost 4%.Ouch. Japan’s main stock index, the Nikkei, has just closed at its lowest level in six months, shedding almost 4%.
Just two hours ago, the Nikkei was up 1%, before worries swept the Asian markets again.Just two hours ago, the Nikkei was up 1%, before worries swept the Asian markets again.
Turnover on the Tokyo market has been very brisk, hitting the highest level since November 2014, Reuters says.Turnover on the Tokyo market has been very brisk, hitting the highest level since November 2014, Reuters says.
Updated at 4.17pm AEST Updated at 7.17am BST
4.07pm AEST07:07 7.07am BST07:07
Martin Farrer in Sydney handing over to Grame Wearden in London. Thanks for joining me.Martin Farrer in Sydney handing over to Grame Wearden in London. Thanks for joining me.
4.00pm AEST07:00 7.00am BST07:00
Sell-off resumes as China worries drag on marketsSell-off resumes as China worries drag on markets
The rout is gathering pace again.The rout is gathering pace again.
The Shanghai Comp is down more than 6% while the Nikkei in Tokyo and the Hang Seng are also down in a wave of selling since the Chinese markets reopened after lunch.The Shanghai Comp is down more than 6% while the Nikkei in Tokyo and the Hang Seng are also down in a wave of selling since the Chinese markets reopened after lunch.
One or two markets are proving immune to such negativity, namely Australia, South Korea and TaiwanOne or two markets are proving immune to such negativity, namely Australia, South Korea and Taiwan
Updated at 4.02pm AEST Updated at 7.02am BST
3.59pm AEST06:59 6.59am BST06:59
China's Shanghai Composite now down 6%China's Shanghai Composite now down 6%
After a volatile session, the main Asian markets are suffering a late selloff.After a volatile session, the main Asian markets are suffering a late selloff.
The Shanghai Composite index is now down by over 6%, with an hour’s trading to go.The Shanghai Composite index is now down by over 6%, with an hour’s trading to go.
That puts the index close to the 3,000 point mark, meaning it’s now down by 6.5% this year.That puts the index close to the 3,000 point mark, meaning it’s now down by 6.5% this year.
Here we go again, Shanghai Comp. down over 6.2%.... Just 6 points above 3,000 now #ChinaMeltdown #ChinaMarkets pic.twitter.com/jdYQWzLpsZHere we go again, Shanghai Comp. down over 6.2%.... Just 6 points above 3,000 now #ChinaMeltdown #ChinaMarkets pic.twitter.com/jdYQWzLpsZ
And Japan’s market is having a wobble too, as trading draws to a close in Tokyo. Here’s the picture across the Asian indices right now:And Japan’s market is having a wobble too, as trading draws to a close in Tokyo. Here’s the picture across the Asian indices right now:
3.51pm AEST06:51 6.51am BST06:51
Angus Nicholson at IG Markets in Sydney thinks we might be seeing some more realistic valuations in the Chinese markets, which is why they’re lagging so much.Angus Nicholson at IG Markets in Sydney thinks we might be seeing some more realistic valuations in the Chinese markets, which is why they’re lagging so much.
He thinks the authorities – what he calls the National Team – have decided to step back from interventions in the wake of a recent meeting of senior leaders at Beidaihe He writes:He thinks the authorities – what he calls the National Team – have decided to step back from interventions in the wake of a recent meeting of senior leaders at Beidaihe He writes:
Asian stocks obtained some respite after yesterday’s brutal sell off. Chinese stocks continued their declines, initially opening down over 6%, paring this back to 2.8%, then pushing back to a 4% decline.Asian stocks obtained some respite after yesterday’s brutal sell off. Chinese stocks continued their declines, initially opening down over 6%, paring this back to 2.8%, then pushing back to a 4% decline.
What is increasingly clear is that the “National Team”, the China Securities Finance Corporation (CSFC), have stopped their daily interventions. The post-Beidaihe consensus appears to be that this was costing the government too much money. Thus, the rallies we are seeing in Chinese markets may have more to do with better valuations than government intervention.What is increasingly clear is that the “National Team”, the China Securities Finance Corporation (CSFC), have stopped their daily interventions. The post-Beidaihe consensus appears to be that this was costing the government too much money. Thus, the rallies we are seeing in Chinese markets may have more to do with better valuations than government intervention.
3.46pm AEST06:46 6.46am BST06:46
Tricky business this. I’m watching Bloomberg TV here in the office and the Shanghai Comp is moving downwards at a rapid rate of knots to – it’s down 5.47% now.Tricky business this. I’m watching Bloomberg TV here in the office and the Shanghai Comp is moving downwards at a rapid rate of knots to – it’s down 5.47% now.
Other Asian bourses are being dragged down too – Tokyo, Hong Kong both in the red.Other Asian bourses are being dragged down too – Tokyo, Hong Kong both in the red.
3.34pm AEST06:34 6.34am BST06:34
The Australian market has performed the strongest today.The Australian market has performed the strongest today.
CMC Markets chief strategist in Australia Michael McCarthy said:CMC Markets chief strategist in Australia Michael McCarthy said:
It is too early to say we are out of the woods. We might see a significant rally and a further significant sell-off. But, at the very least, we have seen a circuit breaker in that sour sentiment, and that should see markets in this region stabilise.It is too early to say we are out of the woods. We might see a significant rally and a further significant sell-off. But, at the very least, we have seen a circuit breaker in that sour sentiment, and that should see markets in this region stabilise.
3.24pm AEST06:24 6.24am BST06:24
Markets down, up, and down again ...Markets down, up, and down again ...
If you’re just waking up in Europe – or wherever else for that matter – it has been a volatile day of trading on Asia Pacific markets.If you’re just waking up in Europe – or wherever else for that matter – it has been a volatile day of trading on Asia Pacific markets.
Stock markets fell quite sharply at the opening this morning but – with the exception of the Chinese bourses despite a $24bn injection from the central bank – recovered strongly.Stock markets fell quite sharply at the opening this morning but – with the exception of the Chinese bourses despite a $24bn injection from the central bank – recovered strongly.
However, as the Chinese markets come back from lunch (which is clearly not for wimps there) there are signs of the recovery beginning to weaken, especially in Japan where the Nikkei is back in the red.However, as the Chinese markets come back from lunch (which is clearly not for wimps there) there are signs of the recovery beginning to weaken, especially in Japan where the Nikkei is back in the red.
Anyway, the current state of play is this:Anyway, the current state of play is this:
3.06pm AEST06:06 6.06am BST06:06
For slightly more on this, the Guardian’s Larry Elliott has written about how the selling on Monday showed what markets can look like when the stimulants – in the form of quantitative easing – wear off.For slightly more on this, the Guardian’s Larry Elliott has written about how the selling on Monday showed what markets can look like when the stimulants – in the form of quantitative easing – wear off.
Larry writes:Larry writes:
Financial markets have gone cold turkey. For the past seven years, they have been given regular doses of strong and dangerous narcotics. The threat that the drugs will no longer be available has resulted in severe withdrawal symptoms ...Financial markets have gone cold turkey. For the past seven years, they have been given regular doses of strong and dangerous narcotics. The threat that the drugs will no longer be available has resulted in severe withdrawal symptoms ...
On the day that QE was launched in the UK, 9 March 2009, the FTSE 100 stood at 3,542 points. Its recent peak on 27 April this year was 7,103 points, a gain of 100.5%. There is a similar correlation between the three rounds of QE in the US and the performance of the S&P 500, which was up more than 200% during the same period.On the day that QE was launched in the UK, 9 March 2009, the FTSE 100 stood at 3,542 points. Its recent peak on 27 April this year was 7,103 points, a gain of 100.5%. There is a similar correlation between the three rounds of QE in the US and the performance of the S&P 500, which was up more than 200% during the same period.
Here’s the full article.Here’s the full article.
Related: China stock market panic shows what happens when stimulants wear offRelated: China stock market panic shows what happens when stimulants wear off
3.02pm AEST06:02 6.02am BST06:02
Michael Hewson of CMC Markets in London is another who thinks this is a correction that is overdue rather than the harbinger of global meltdown. He thinks today may see a let up in the selling of recent days.Michael Hewson of CMC Markets in London is another who thinks this is a correction that is overdue rather than the harbinger of global meltdown. He thinks today may see a let up in the selling of recent days.
While the moves in recent days have been quite alarming in their volatility when one looks back at the performance of stock markets over the last six years, perhaps the recent declines are long overdue.While the moves in recent days have been quite alarming in their volatility when one looks back at the performance of stock markets over the last six years, perhaps the recent declines are long overdue.
For the last six years investors have been spoilt by central bankers who have been extraordinarily successful in pushing stock markets to record highs with the use of large scale loose monetary policy, while the Chinese economy has been growing at a fairly decent clip.For the last six years investors have been spoilt by central bankers who have been extraordinarily successful in pushing stock markets to record highs with the use of large scale loose monetary policy, while the Chinese economy has been growing at a fairly decent clip.
This steady growth was almost an unspoken truth until the middle part of this year as attempts by the Chinese central bank to stimulate a recovery in its own economic slowdown ran into the combined efforts of the Bank of Japan and the European Central Bank, whose policies have weakened their own currencies against the Chinese yuan, and in the process eroded China’s competitiveness.This steady growth was almost an unspoken truth until the middle part of this year as attempts by the Chinese central bank to stimulate a recovery in its own economic slowdown ran into the combined efforts of the Bank of Japan and the European Central Bank, whose policies have weakened their own currencies against the Chinese yuan, and in the process eroded China’s competitiveness.
In seeking to nudge its currency lower Chinese authorities appear to have triggered widespread concerns that all is not as well as previously thought with the world’s second biggest economy, and in the process triggered a widespread reassessment of valuations in some of the most sensitive sectors to the business and commodity cycle.In seeking to nudge its currency lower Chinese authorities appear to have triggered widespread concerns that all is not as well as previously thought with the world’s second biggest economy, and in the process triggered a widespread reassessment of valuations in some of the most sensitive sectors to the business and commodity cycle.
2.52pm AEST05:52 5.52am BST05:52
Back to commodities and they’ve made a decent recovery today with the oil benchmarks up slightly.Back to commodities and they’ve made a decent recovery today with the oil benchmarks up slightly.
US crude was up to $38.67 after closing at $38.24 a barrel in New York on Monday night, its first below-$40 close since February 2009.US crude was up to $38.67 after closing at $38.24 a barrel in New York on Monday night, its first below-$40 close since February 2009.
Brent crude for October was at $43.13 a barrel after closing at $42.69 a barrel in London, its lowest level since March 2009.Brent crude for October was at $43.13 a barrel after closing at $42.69 a barrel in London, its lowest level since March 2009.
The Bloomberg commodity index, which tracks 22 raw materials, was up 0.58% to 86.3507, after losing 2.2% on Monday to close at its lowest point since August 1999.The Bloomberg commodity index, which tracks 22 raw materials, was up 0.58% to 86.3507, after losing 2.2% on Monday to close at its lowest point since August 1999.
2.42pm AEST05:42 5.42am BST05:42
And bullish investor sentiment from the Mayne man.And bullish investor sentiment from the Mayne man.
2.41pm AEST05:41 5.41am BST05:41
Trading in China and Hong Kong has stopped for lunch so things are quite calm. Seems like a good time to look at more reaction to what’’s been going on.Trading in China and Hong Kong has stopped for lunch so things are quite calm. Seems like a good time to look at more reaction to what’’s been going on.
The consensus is definitely towards the view that other markets are decoupling from any China contagion.The consensus is definitely towards the view that other markets are decoupling from any China contagion.
This from Capital Economics is in that ballpark:This from Capital Economics is in that ballpark:
The current panic is essentially ‘made in China’. The recent data from other major economies have generally been good and there is little to justify fears of a major global downturn.The current panic is essentially ‘made in China’. The recent data from other major economies have generally been good and there is little to justify fears of a major global downturn.
China’s recent economic data suggest that growth remains sluggish, but are not weak enough to justify fears of a hard landing.China’s recent economic data suggest that growth remains sluggish, but are not weak enough to justify fears of a hard landing.
2.16pm AEST05:16 5.16am BST05:16
Having said that, the S&P VIX volatility index, otherwise known as the Fear Index, is heading north again – a bad sign.Having said that, the S&P VIX volatility index, otherwise known as the Fear Index, is heading north again – a bad sign.
As my colleague Graeme Wearden explained yesterday, “the VIX tracks the prices of options on the S&P 500, which are often used to hedge against potential losses. So a jump in the VIX shows that investors are getting scared...”As my colleague Graeme Wearden explained yesterday, “the VIX tracks the prices of options on the S&P 500, which are often used to hedge against potential losses. So a jump in the VIX shows that investors are getting scared...”
2.05pm AEST05:05 5.05am BST05:05
US futures are helping the market bounce back.US futures are helping the market bounce back.
The US market is headed for a 2% rise at the opening on Tuesday which has breathed life back into Asia today.The US market is headed for a 2% rise at the opening on Tuesday which has breathed life back into Asia today.
1.57pm AEST04:57 4.57am BST04:57
1.54pm AEST04:54 4.54am BST04:54
Market recovery - in picturesMarket recovery - in pictures
1.48pm AEST04:48 4.48am BST04:48
Asian markets bounce off three-year lowsAsian markets bounce off three-year lows
Bargain hunting looks like it has helped lift Asian shares.Bargain hunting looks like it has helped lift Asian shares.
The MSCI’s broadest index of Asia-Pacific shares outside Japan is up 1.7% after an initial dip to three-year lows, and Japan’s Nikkei index also erased most of its early losses after an initial drop of 4.3%. It’s currently up 1.1%.The MSCI’s broadest index of Asia-Pacific shares outside Japan is up 1.7% after an initial dip to three-year lows, and Japan’s Nikkei index also erased most of its early losses after an initial drop of 4.3%. It’s currently up 1.1%.
Yukino Yamada, senior strategist at Daiwa Securities in Tokyo, said:Yukino Yamada, senior strategist at Daiwa Securities in Tokyo, said:
There appears to be buyback as many markets look oversold after panicky selling in the last few days. Even the shares that had little business ties with China were sold.There appears to be buyback as many markets look oversold after panicky selling in the last few days. Even the shares that had little business ties with China were sold.
Hang Seng up 1.28%.Hang Seng up 1.28%.
ASX200 up 2.19%.ASX200 up 2.19%.
Kospi up 1.62%.Kospi up 1.62%.
However, China’s markets are still being sold. The Shanghai Comp is down 4.33%.However, China’s markets are still being sold. The Shanghai Comp is down 4.33%.
Updated at 2.01pm AEST Updated at 5.01am BST
1.38pm AEST04:38 4.38am BST04:38
Morgan Stanley says shares in Australia’s banks have further to fall despite the rally today.Morgan Stanley says shares in Australia’s banks have further to fall despite the rally today.
The banks have seen record profits on the back of the booming housing market in Sydney and Melbourne, but some observers believe they are overpriced even after the recent falls.The banks have seen record profits on the back of the booming housing market in Sydney and Melbourne, but some observers believe they are overpriced even after the recent falls.
Morgan reckons that the big four are still “on average, 12% above its bear case scenario”.Morgan reckons that the big four are still “on average, 12% above its bear case scenario”.
Thanks to Mike Janda of the ABC for this.Thanks to Mike Janda of the ABC for this.
1.30pm AEST04:30 4.30am BST04:30
And here is Stephen’s piece. So much going on today that I missed it launching a few minutes ago ...And here is Stephen’s piece. So much going on today that I missed it launching a few minutes ago ...
Related: Searching questions for Tony Abbott if turmoil on stock markets gets worseRelated: Searching questions for Tony Abbott if turmoil on stock markets gets worse
1.29pm AEST04:29 4.29am BST04:29
One of our roving economics commentators, Stephen Koukoulas, has been looking at the market turbulence.One of our roving economics commentators, Stephen Koukoulas, has been looking at the market turbulence.
His analysis will be online shortly but here is a taster:His analysis will be online shortly but here is a taster:
The savage market ructions of recent weeks and days are disconcerting. While not unprecedented, the quite staggering fall in share markets and commodity prices are threatening to undermine the global economy.The savage market ructions of recent weeks and days are disconcerting. While not unprecedented, the quite staggering fall in share markets and commodity prices are threatening to undermine the global economy.
For Australia, the news is particularly alarming. Australia’s stock market has not performed well in recent years, lagging well behind the other markets. If the market ructions translate to an extended period of weak global growth, Australia’s already dismal export performance will be hampered and the commodity price weakness will further undermine national incomes.For Australia, the news is particularly alarming. Australia’s stock market has not performed well in recent years, lagging well behind the other markets. If the market ructions translate to an extended period of weak global growth, Australia’s already dismal export performance will be hampered and the commodity price weakness will further undermine national incomes.
1.25pm AEST04:25 4.25am BST04:25
Here’s our first news take on the story today from our correspondent in Tokyo, Justin McCurry.Here’s our first news take on the story today from our correspondent in Tokyo, Justin McCurry.
Related: Asian stock markets swing wildly as Chinese shares take another batteringRelated: Asian stock markets swing wildly as Chinese shares take another battering
1.22pm AEST04:22 4.22am BST04:22
Tony Abbott, the Australian prime minister, has become the latest politician to have his say. Not surprisingly, he is adopting the “nothing to see here” approach.Tony Abbott, the Australian prime minister, has become the latest politician to have his say. Not surprisingly, he is adopting the “nothing to see here” approach.
He has urged Australians not to “hyperventilate” over the slump on global share markets after receiving a briefing from the Reserve Bank governor, Glenn Stevens, and senior officials on Tuesday morning.He has urged Australians not to “hyperventilate” over the slump on global share markets after receiving a briefing from the Reserve Bank governor, Glenn Stevens, and senior officials on Tuesday morning.
I think it’s important that people don’t hyperventilate about these type of things. While the Chinese economy is slowing, the rest of the world economy does appear to be picking up.I think it’s important that people don’t hyperventilate about these type of things. While the Chinese economy is slowing, the rest of the world economy does appear to be picking up.
America is growing, not spectacularly but steadily. Europe certainly seems to have turned the corner ... and here in Australia, our fundamentals are strong.America is growing, not spectacularly but steadily. Europe certainly seems to have turned the corner ... and here in Australia, our fundamentals are strong.
Updated at 2.03pm AEST Updated at 5.03am BST
1.18pm AEST04:18 4.18am BST04:18
Markets bounce backMarkets bounce back
It’s been a much better day so far with the major markets – except China – back in positive territory.It’s been a much better day so far with the major markets – except China – back in positive territory.
Here are the main points:Here are the main points:
Updated at 3.21pm AEST Updated at 6.21am BST
1.16pm AEST04:16 4.16am BST04:16
Goldman Sachs has moved in to steady the ship. The global economy is not at risk of a recession, it says.Goldman Sachs has moved in to steady the ship. The global economy is not at risk of a recession, it says.
Thanks to Reuters, here is what Goldman’s experts said in a note to clients:Thanks to Reuters, here is what Goldman’s experts said in a note to clients:
The drop in commodity prices during the past year and recent economic and foreign exchange weakness in China and other emerging markets will not tip the global economy into recession.The drop in commodity prices during the past year and recent economic and foreign exchange weakness in China and other emerging markets will not tip the global economy into recession.
But the Wall Street bank reduced its short-term outlook for the equity market to “neutral”. It also maintained its view that commodities will underperform.But the Wall Street bank reduced its short-term outlook for the equity market to “neutral”. It also maintained its view that commodities will underperform.
We see a meaningful risk that markets are overinterpreting the collapse of oil and commodity prices as a negative growth signal. The fall in prices of oil and other commodities are primarily a reflection of excess supply rather than weak demand.We see a meaningful risk that markets are overinterpreting the collapse of oil and commodity prices as a negative growth signal. The fall in prices of oil and other commodities are primarily a reflection of excess supply rather than weak demand.
Updated at 2.05pm AEST Updated at 5.05am BST
12.53pm AEST03:53 3.53am BST03:53
On the sea of red v sea of green debate, the answer is, of course, that red is an auspicious colour in Chinese culture, indicating wealth.On the sea of red v sea of green debate, the answer is, of course, that red is an auspicious colour in Chinese culture, indicating wealth.
Thanks to Tom Phillips, our man in Beijing.Thanks to Tom Phillips, our man in Beijing.
Updated at 2.06pm AEST Updated at 5.06am BST
12.30pm AEST03:30 3.30am BST03:30
Things are still improving on the main indices. Even the Nikkei has returned to positive territory, up slightly by 0.12%.Things are still improving on the main indices. Even the Nikkei has returned to positive territory, up slightly by 0.12%.
And yet, sentiment remains quite negative in Shanghai, where the Composite Index is still off 4.6%.And yet, sentiment remains quite negative in Shanghai, where the Composite Index is still off 4.6%.
Zhou Lin, an analyst at Huatai Securities, doesn’t see any sign of government intervention:Zhou Lin, an analyst at Huatai Securities, doesn’t see any sign of government intervention:
Global investors are cannibalising each other. Calling it a market disaster is not an overstatement. The mood of panic is dominating the market ... And I don’t see any signs of meaningful government intervention.Global investors are cannibalising each other. Calling it a market disaster is not an overstatement. The mood of panic is dominating the market ... And I don’t see any signs of meaningful government intervention.
Updated at 2.07pm AEST Updated at 5.07am BST
12.22pm AEST03:22 3.22am BST03:22
Bear or bull? A good up-summing of the market dilemma by the Australian stock exchange’s chief, Elmer Funke Kupper.Bear or bull? A good up-summing of the market dilemma by the Australian stock exchange’s chief, Elmer Funke Kupper.
He has told Australian Associated Press:He has told Australian Associated Press:
There are two schools of thought. One is this is a correction that was probably a little bit overdue.There are two schools of thought. One is this is a correction that was probably a little bit overdue.
There is another school of thought that says maybe the world economy is not recovering quite as well as everybody had been thinking and therefore we’re more into bear territory.There is another school of thought that says maybe the world economy is not recovering quite as well as everybody had been thinking and therefore we’re more into bear territory.
I think it’s actually very difficult to call, and so you see these gyrations when people are getting worried about these things.I think it’s actually very difficult to call, and so you see these gyrations when people are getting worried about these things.
Funke Kupper added that investors should consider their personal circumstances when deciding how to respond.Funke Kupper added that investors should consider their personal circumstances when deciding how to respond.
It all depends on your personal circumstances. For some people these corrections are a fantastic buying opportunity.It all depends on your personal circumstances. For some people these corrections are a fantastic buying opportunity.
Updated at 2.08pm AEST Updated at 5.08am BST
12.16pm AEST03:16 3.16am BST03:16
Stock markets are recoveringStock markets are recovering
Looking much better now for the markets.Looking much better now for the markets.
12.09pm AEST03:09 3.09am BST03:09
You have to laugh ... This from the Onion.You have to laugh ... This from the Onion.
And by the way, you have to remember that falling stocks appear in green in China, not red as commonly used in western markets. I’m hoping someone can give a full explanation of why this is.And by the way, you have to remember that falling stocks appear in green in China, not red as commonly used in western markets. I’m hoping someone can give a full explanation of why this is.
Updated at 2.09pm AEST Updated at 5.09am BST
12.00pm AEST03:00 3.00am BST03:00
The Japanese are talking tough on the ugly (for them anyway) side-effect of the China situation, namely that the yen has gone back to seven-month highs as investors seek a safe haven.The Japanese are talking tough on the ugly (for them anyway) side-effect of the China situation, namely that the yen has gone back to seven-month highs as investors seek a safe haven.
We’ve now got some more intelligible quotes from the Japanese finance minister, Taro Aso, who warned market players against pushing up the yen too much further as the currency experienced “rough”.We’ve now got some more intelligible quotes from the Japanese finance minister, Taro Aso, who warned market players against pushing up the yen too much further as the currency experienced “rough”.
He said that while there was no immediate plan for G20 and G7 nations to take coordinated action against the market turmoil, global financial authorities were in frequent contact with each other on market developments.He said that while there was no immediate plan for G20 and G7 nations to take coordinated action against the market turmoil, global financial authorities were in frequent contact with each other on market developments.
Of the yen spike, he said:Of the yen spike, he said:
I would say they are rough, rather than rapid. For the economy to grow stably, it’s better for [currency and stock price] moves to be gradual and steady, rather than rough.I would say they are rough, rather than rapid. For the economy to grow stably, it’s better for [currency and stock price] moves to be gradual and steady, rather than rough.
Updated at 2.10pm AEST Updated at 5.10am BST
11.51am AEST02:51 2.51am BST02:51
It’s going to be difficult to see where markets are going to end up today.It’s going to be difficult to see where markets are going to end up today.
On the up side we have:On the up side we have:
But on the down side:But on the down side:
Updated at 2.10pm AEST Updated at 5.10am BST
11.42am AEST02:42 2.42am BST02:42
China's central bank pumps $24bn of liquidity into the marketChina's central bank pumps $24bn of liquidity into the market
The Shanghai Composite index lost 6.4% to 3,004.13 points at the opening a few minutes ago after yesterday’s near-9% plunge sparked another global rout.The Shanghai Composite index lost 6.4% to 3,004.13 points at the opening a few minutes ago after yesterday’s near-9% plunge sparked another global rout.
The CSI300 index was also down 6.3% at 3,070.01 points.The CSI300 index was also down 6.3% at 3,070.01 points.
This is despite an injection of liquidity, Reuters reports.This is despite an injection of liquidity, Reuters reports.
The central bank made a large 150bn yuan ($23.43bn) injection into the interbank market on Tuesday morning during open market operations.The central bank made a large 150bn yuan ($23.43bn) injection into the interbank market on Tuesday morning during open market operations.
However, similarly large injections last week had little impact on stock market sentiment as the funds remain in the market for only seven days.However, similarly large injections last week had little impact on stock market sentiment as the funds remain in the market for only seven days.
In fact, many investors worry the injections are being used as a substitute for the longer-term easing to bank reserve requirement ratios which would free up far more substantial sums of cash for long-term investment.In fact, many investors worry the injections are being used as a substitute for the longer-term easing to bank reserve requirement ratios which would free up far more substantial sums of cash for long-term investment.
Updated at 2.12pm AEST Updated at 5.12am BST
11.31am AEST02:31 2.31am BST02:31
Back to stocks and some good news. Australian shares have continued to bounce back.Back to stocks and some good news. Australian shares have continued to bounce back.
11.24am AEST02:24 2.24am BST02:24
We haven’t looked at commodities yet this morning, so here goes.We haven’t looked at commodities yet this morning, so here goes.
It’s looking slightly better with US crude up slightly at US$38.38 a barrel, although the US benchmark and Brent are still sitting on six-year lows.It’s looking slightly better with US crude up slightly at US$38.38 a barrel, although the US benchmark and Brent are still sitting on six-year lows.
Gold meanwhile steadied below a seven-week high early on Tuesday.Gold meanwhile steadied below a seven-week high early on Tuesday.
11.21am AEST02:21 2.21am BST02:21
But it’s by no means certain. If this is just a correction – as Joe Hockey said this morning – then there’s nothing to worry about and the Fed should go right on ahead, shouldn’t it?But it’s by no means certain. If this is just a correction – as Joe Hockey said this morning – then there’s nothing to worry about and the Fed should go right on ahead, shouldn’t it?
Toru Yamamoto, chief bond strategist at Daiwa Securities, said today:Toru Yamamoto, chief bond strategist at Daiwa Securities, said today:
There seems to be no consensus with the Fed on whether they are worried about acting too prematurely or too late.There seems to be no consensus with the Fed on whether they are worried about acting too prematurely or too late.
However, Chris Weston at IG in Sydney is sure there won’t be a hike now but still thinks that someone has to do something:However, Chris Weston at IG in Sydney is sure there won’t be a hike now but still thinks that someone has to do something:
The ferocity behind the selling is there for everyone to see and there is an all-out liquidation of equity holding. Clearly, the Federal Reserve are not going to hike rates in September and the market is now placing a 20% probability on this fate. Still, we are going to need to see something more inspiring than the Fed holding-off on hiking rates. The mere fact they are having to hold off is bearish in itself, but we need to see something coordinated and specifically coming from Asia given this is where the concern is stemming from.The ferocity behind the selling is there for everyone to see and there is an all-out liquidation of equity holding. Clearly, the Federal Reserve are not going to hike rates in September and the market is now placing a 20% probability on this fate. Still, we are going to need to see something more inspiring than the Fed holding-off on hiking rates. The mere fact they are having to hold off is bearish in itself, but we need to see something coordinated and specifically coming from Asia given this is where the concern is stemming from.
China failed to cut reserve ratio requirements (RRR) over the weekend and this has hurt sentiment and cutting this ratio is a measure designed to fight fires; this alone is not going to significantly reverse sentiment.China failed to cut reserve ratio requirements (RRR) over the weekend and this has hurt sentiment and cutting this ratio is a measure designed to fight fires; this alone is not going to significantly reverse sentiment.
Still, we will need to hear of easing measures fairly soon and we need to hear of commercial banks increasing liquidity to infrastructure projects. In general, the focus has to shift to something sizeable on the fiscal side.Still, we will need to hear of easing measures fairly soon and we need to hear of commercial banks increasing liquidity to infrastructure projects. In general, the focus has to shift to something sizeable on the fiscal side.
China needs to convince the domestic market and the world that its economy is able to cope with further outflows and that its slowdown is under control.China needs to convince the domestic market and the world that its economy is able to cope with further outflows and that its slowdown is under control.
Updated at 2.15pm AEST Updated at 5.15am BST
11.13am AEST02:13 2.13am BST02:13
It looks like a lot of volatility until the China market opens. Until then, perhaps we should have a quick look at the bigger picture, namely whether or not this market correction (let’s stick with that before we call it a crisis, or even a crash) means that the US Federal Reserve will still raise rates, as has been widely expected for months.It looks like a lot of volatility until the China market opens. Until then, perhaps we should have a quick look at the bigger picture, namely whether or not this market correction (let’s stick with that before we call it a crisis, or even a crash) means that the US Federal Reserve will still raise rates, as has been widely expected for months.
A former US treasury secretary, Lawrence Summers, is in no doubt, saying raising rates soon would be a “serious error”. He said in an opinion piece for the Wall Street Journal:A former US treasury secretary, Lawrence Summers, is in no doubt, saying raising rates soon would be a “serious error”. He said in an opinion piece for the Wall Street Journal:
A reasonable assessment of current conditions suggests that raising rates in the near future would be a serious error that would threaten all three of the Fed’s major objectives: price stability, full employment and financial stability.A reasonable assessment of current conditions suggests that raising rates in the near future would be a serious error that would threaten all three of the Fed’s major objectives: price stability, full employment and financial stability.
Updated at 2.15pm AEST Updated at 5.15am BST
11.04am AEST02:04 2.04am BST02:04
The ASX200 has gone into positive territory for the day helped by investors buying up bank stocks.The ASX200 has gone into positive territory for the day helped by investors buying up bank stocks.
They have taken a fearsome beating in recent days – the financial sector was down 4.6% on Monday alone – so bargain hunters obviously think they’re now going cheap.They have taken a fearsome beating in recent days – the financial sector was down 4.6% on Monday alone – so bargain hunters obviously think they’re now going cheap.
Investor champion Stephen Mayne clearly thinks so.Investor champion Stephen Mayne clearly thinks so.
10.48am AEST01:48 1.48am BST01:48
Now it’s the turn of Japan’s economics minister Akira Amari. As we reported just a little earlier, investors are buying the yen as a safe-haven asset, bossting it to a seven-month high against the US dollar, which is not really what PM Shinzo Abe wants to happen.Now it’s the turn of Japan’s economics minister Akira Amari. As we reported just a little earlier, investors are buying the yen as a safe-haven asset, bossting it to a seven-month high against the US dollar, which is not really what PM Shinzo Abe wants to happen.
However, Amari is putting some heroic spin on it. He says the buying shows Japan’s economic fundamentals are strong, Reuters reports. A bubble had formed in China’s stock market and that stock prices are now adjusting lower, he said.However, Amari is putting some heroic spin on it. He says the buying shows Japan’s economic fundamentals are strong, Reuters reports. A bubble had formed in China’s stock market and that stock prices are now adjusting lower, he said.
And he added that it was up to the Bank of Japan to decide whether or not to ease monetary policy again – ie more QE to force the yen back down.And he added that it was up to the Bank of Japan to decide whether or not to ease monetary policy again – ie more QE to force the yen back down.
10.39am AEST01:39 1.39am BST01:39
The fightback is definitely on this morning. The ASX200 is now up 0.4%.The fightback is definitely on this morning. The ASX200 is now up 0.4%.
The Nikkei is still getting hammered though. Down 3.57% now.The Nikkei is still getting hammered though. Down 3.57% now.
China’s response/lack thereof now looks increasingly critical.China’s response/lack thereof now looks increasingly critical.
10.36am AEST01:36 1.36am BST01:36
Japan urges China to take actionJapan urges China to take action
The Japanese finance minister Taro Aso has urged China to do something to stop the bleeding.The Japanese finance minister Taro Aso has urged China to do something to stop the bleeding.
forexlive reports that Aso said:forexlive reports that Aso said:
Hope Chinese authorities take appropriate action to stabilise economy, which has big impact on global growth.Hope Chinese authorities take appropriate action to stabilise economy, which has big impact on global growth.
Recent yen moves are rough, rather than rapid.Recent yen moves are rough, rather than rapid.
He also said there are no plans for international coordinated action though.He also said there are no plans for international coordinated action though.
Hopefully we’ll get a proper version of his quotes soon where he doesn’t sound like a robot.Hopefully we’ll get a proper version of his quotes soon where he doesn’t sound like a robot.
10.26am AEST01:26 1.26am BST01:26
But check this out. The Kospi index in Seoul is UP UP UP. Amazing stuff – it’s risen 0.12%. The fightback starts here.But check this out. The Kospi index in Seoul is UP UP UP. Amazing stuff – it’s risen 0.12%. The fightback starts here.
10.26am AEST01:26 1.26am BST01:26
The Nikkei in Japan is down around 2%.The Nikkei in Japan is down around 2%.
10.21am AEST01:21 1.21am BST01:21
Or is the ASX rallying?Or is the ASX rallying?
Much will clearly depend on what happens when the Chinese market opens later on this morning – in fact, in a little more than an hour’s time. No sign yet of any policy moves by the People’s Bank of China.Much will clearly depend on what happens when the Chinese market opens later on this morning – in fact, in a little more than an hour’s time. No sign yet of any policy moves by the People’s Bank of China.
10.16am AEST01:16 1.16am BST01:16
More on Australia, where the exposure to China is acute.More on Australia, where the exposure to China is acute.
10.14am AEST01:14 1.14am BST01:14
ASX200 is tanking again in Australia. Now down 1.5% with all sectors taking a beating, says CommSec.ASX200 is tanking again in Australia. Now down 1.5% with all sectors taking a beating, says CommSec.
10.10am AEST01:10 1.10am BST01:10
Kospi down a little in Seoul.Kospi down a little in Seoul.
10.08am AEST01:08 1.08am BST01:08
Japanese and Australian markets open downJapanese and Australian markets open down
Not too bad in Australia – ASX200 down 0.6%. But Nikkei down 2.5% in Tokyo.Not too bad in Australia – ASX200 down 0.6%. But Nikkei down 2.5% in Tokyo.
10.03am AEST01:03 1.03am BST01:03
Tom Phillips is on deck in Beijing and he sends us this from the Global Times, a Beijing-run tabloid, which blames western doomsayers for some of the problems.Tom Phillips is on deck in Beijing and he sends us this from the Global Times, a Beijing-run tabloid, which blames western doomsayers for some of the problems.
There seems to be only one reason for the tumble – investors lack confidence in China’s economic outlook. The newly released economic figures do not look good. It seems that the words “misfortunes never come alone” have come true.There seems to be only one reason for the tumble – investors lack confidence in China’s economic outlook. The newly released economic figures do not look good. It seems that the words “misfortunes never come alone” have come true.
But the stridently nationalist paper, which is controlled by the Communist party’s mouthpiece paper, The People’s Daily, warned against paying too much attention to western doomsayers.But the stridently nationalist paper, which is controlled by the Communist party’s mouthpiece paper, The People’s Daily, warned against paying too much attention to western doomsayers.
There is no need to worry because of pessimistic voices from the outside world. China’s economy is in a bitter period of structural adjustments. We should become inured to face all sorts of problems with grace. This temporary lack of confidence will not snowball to become destructive.There is no need to worry because of pessimistic voices from the outside world. China’s economy is in a bitter period of structural adjustments. We should become inured to face all sorts of problems with grace. This temporary lack of confidence will not snowball to become destructive.
10.01am AEST01:01 1.01am BST01:01
The flip side of that is that other currencies seen as safe havens are doing much better. The yen, for example. That’s bad news for Japanese policymakers who want the yen to fall in value so its exports are cheaper.The flip side of that is that other currencies seen as safe havens are doing much better. The yen, for example. That’s bad news for Japanese policymakers who want the yen to fall in value so its exports are cheaper.
Here’s Reuters:Here’s Reuters:
A senior Japanese government official said on Tuesday that recent exchange-rate moves “appear to be rapid” after the yen surged to a seven-month high against the dollar as investors fled risk amid a global stock market rout.A senior Japanese government official said on Tuesday that recent exchange-rate moves “appear to be rapid” after the yen surged to a seven-month high against the dollar as investors fled risk amid a global stock market rout.
Asked whether a meeting on market moves was planned on Tuesday among the ministry of finance, Bank of Japan and the financial services agency, the official told reporters: “There is no plan to hold one today.”Asked whether a meeting on market moves was planned on Tuesday among the ministry of finance, Bank of Japan and the financial services agency, the official told reporters: “There is no plan to hold one today.”
But he added that the authorities may hold such a meeting in future as needed.But he added that the authorities may hold such a meeting in future as needed.
9.55am AEST00:55 12.55am BST00:55
Australian dollar falls to new six-year lowAustralian dollar falls to new six-year low
I guess Hockey’s glass half-full view will be stress-tested a fair bit in the next few days. Very exciting stuff.I guess Hockey’s glass half-full view will be stress-tested a fair bit in the next few days. Very exciting stuff.
In the meantime, the Australian dollar – along with many other currencies exposed to the Chinese economy – is having a tough time.In the meantime, the Australian dollar – along with many other currencies exposed to the Chinese economy – is having a tough time.
The Aussie is down more 0.58% at US71.76c this morning after coming under pressure overnight.The Aussie is down more 0.58% at US71.76c this morning after coming under pressure overnight.
9.50am AEST00:50 12.50am BST00:50
'It’s a correction, not a crisis''It’s a correction, not a crisis'
More from Australian treasurer Joe Hockey, who says this is a correction, not a crisis.More from Australian treasurer Joe Hockey, who says this is a correction, not a crisis.
Daniel Hurst has the full story here, but here’s another snippett:Daniel Hurst has the full story here, but here’s another snippett:
He said countries did not have the same “firepower” – or the capacity to cut interest rates and engage in stimulatory spending – as they did at the onset of the global financial crisis in 2008, but added: “In fact there is no crisis now. It is a correction.”He said countries did not have the same “firepower” – or the capacity to cut interest rates and engage in stimulatory spending – as they did at the onset of the global financial crisis in 2008, but added: “In fact there is no crisis now. It is a correction.”
Hockey said despite the falls, the Chinese stockmarket was still 40% higher than it was 12 months ago “and there has been a lot of flighty money in the Chinese stock market, so that’s part of the equation”.Hockey said despite the falls, the Chinese stockmarket was still 40% higher than it was 12 months ago “and there has been a lot of flighty money in the Chinese stock market, so that’s part of the equation”.
9.44am AEST00:44 12.44am BST00:44
How the Pink Un has called it today.How the Pink Un has called it today.
9.41am AEST00:41 12.41am BST00:41
SUMMARY – a wild 24 hoursSUMMARY – a wild 24 hours
if you’re just joining the blog and you want a ctach up on the events of the past 24 hours, here it is courtesy of my colleague Graeme Weardenif you’re just joining the blog and you want a ctach up on the events of the past 24 hours, here it is courtesy of my colleague Graeme Wearden
To summarise the summary, it was a bad day for the markets.To summarise the summary, it was a bad day for the markets.
9.37am AEST00:37 12.37am BST00:37
In Australia, the federal treasurer Joe Hockey has moved to reassure people that all’s well and that the country can withstand the market volatility. He also hinted that China will wheel out the big guns to try to stop the rot. Question is, what will they do – if anything?In Australia, the federal treasurer Joe Hockey has moved to reassure people that all’s well and that the country can withstand the market volatility. He also hinted that China will wheel out the big guns to try to stop the rot. Question is, what will they do – if anything?
Anyway, my colleague Daniel Hurst will be filing soon on what Hockey has said this morning. But here’s a snippett:Anyway, my colleague Daniel Hurst will be filing soon on what Hockey has said this morning. But here’s a snippett:
I’m absolutely confident, absolutely confident that the fundamentals of the Australian economy and the global economy are still good.I’m absolutely confident, absolutely confident that the fundamentals of the Australian economy and the global economy are still good.
Last week, I met with one of the most senior economic figures in China.He reassured us, from his lips to our ears, that China would use whatever tools it has available to make sure that it grows relatively strongly this year ... There is no doubt.Last week, I met with one of the most senior economic figures in China.He reassured us, from his lips to our ears, that China would use whatever tools it has available to make sure that it grows relatively strongly this year ... There is no doubt.
9.31am AEST00:31 12.31am BST00:31
9.27am AEST00:27 12.27am BST00:27
The first key event of the day will be the opening across Asia and investors are expecting more steep falls. Futures are pointing to a 3.6% fall in the Australian market, taking the ASX200 well below 5,000 points.The first key event of the day will be the opening across Asia and investors are expecting more steep falls. Futures are pointing to a 3.6% fall in the Australian market, taking the ASX200 well below 5,000 points.
Chris Weston from IG Markets said this morning:Chris Weston from IG Markets said this morning:
The world’s capital markets are in meltdown, and investors are asking what can stop the panic. There is no getting away from the fact that this is going to be such a key session.The world’s capital markets are in meltdown, and investors are asking what can stop the panic. There is no getting away from the fact that this is going to be such a key session.
Our opening call is currently 4,820, which implies a 3.6% fall.Our opening call is currently 4,820, which implies a 3.6% fall.
9.23am AEST00:23 12.23am BST00:23
Here we go againHere we go again
Good morning and welcome to the live blog on what promises to be another exciting day on the financial markets.Good morning and welcome to the live blog on what promises to be another exciting day on the financial markets.
After wild swings on Wall Street and Europe, it will be Asia’s turn again this morning, starting with Australia, Japan, South Korea, Taiwan and Malaysia at 10am Sydney time (midnight GMT).After wild swings on Wall Street and Europe, it will be Asia’s turn again this morning, starting with Australia, Japan, South Korea, Taiwan and Malaysia at 10am Sydney time (midnight GMT).
I’ll go through the main points in a minute but firstly a quick look at the scores on the doors, courtesy of Associated Press.I’ll go through the main points in a minute but firstly a quick look at the scores on the doors, courtesy of Associated Press.