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| European stocks dip in volatile trade | European stocks dip in volatile trade |
| (35 minutes later) | |
| European stock markets have followed Asian shares lower as fears persist of a Chinese-led economic slowdown. | European stock markets have followed Asian shares lower as fears persist of a Chinese-led economic slowdown. |
| London's FTSE 100 was 0.4% lower by midday, with markets in Paris and Frankfurt down by similar amounts. | |
| In Tuesday's session on Wall Street, the Dow Jones index rallied at first, but dropped sharply at the close. | In Tuesday's session on Wall Street, the Dow Jones index rallied at first, but dropped sharply at the close. |
| Experts expect market volatility to continue at least until the Federal Reserve next meets in September to set US interest rates. | Experts expect market volatility to continue at least until the Federal Reserve next meets in September to set US interest rates. |
| "Until we get September out of the way, I think markets will continue to be choppy," said Michael Hewson, chief market analyst at CMC Markets. | "Until we get September out of the way, I think markets will continue to be choppy," said Michael Hewson, chief market analyst at CMC Markets. |
| "These are the sorts of swings that we last saw in 2008," he added. | "These are the sorts of swings that we last saw in 2008," he added. |
| Because of the wild market swings in global markets, Mr Hewson said he did not expect a rate rise out of the US next month, because of the central bank's mandate to maintain financial stability. | Because of the wild market swings in global markets, Mr Hewson said he did not expect a rate rise out of the US next month, because of the central bank's mandate to maintain financial stability. |
| "I think they would be absolutely bonkers to raise rates now," he said. | "I think they would be absolutely bonkers to raise rates now," he said. |
| Bad news abounds | Bad news abounds |
| Oil and metals prices were also under pressure, with Brent crude close to six-year lows. | Oil and metals prices were also under pressure, with Brent crude close to six-year lows. |
| "There doesn't seem to be a host of good news out there at the moment," said Brenda Kelly, head analyst at London Capital Group, | "There doesn't seem to be a host of good news out there at the moment," said Brenda Kelly, head analyst at London Capital Group, |
| She said she expected more big market swings on Wall Street later on Wednesday. | She said she expected more big market swings on Wall Street later on Wednesday. |
| The recent global stock market rout began in China, where the benchmark Shanghai Composite has lost about 16% of its value this week. | The recent global stock market rout began in China, where the benchmark Shanghai Composite has lost about 16% of its value this week. |
| On Wednesday, the Shanghai index fell 1.27% to 2,927.29, after veering in and out of negative territory. | On Wednesday, the Shanghai index fell 1.27% to 2,927.29, after veering in and out of negative territory. |
| China contagion | China contagion |
| On Tuesday, China's central bank cut its key lending rate by 0.25 percentage points to 4.6% in a bid to calm stock markets after the past days' turmoil. | On Tuesday, China's central bank cut its key lending rate by 0.25 percentage points to 4.6% in a bid to calm stock markets after the past days' turmoil. |
| The dramatic losses and volatility in China have shattered investor confidence and led to sharp falls in Asia and the US over the past days. | The dramatic losses and volatility in China have shattered investor confidence and led to sharp falls in Asia and the US over the past days. |
| The interest rate cut was the fifth by the People's Bank of China since November last year. | The interest rate cut was the fifth by the People's Bank of China since November last year. |
| A rate cut will make it cheaper for banks to borrow from the central bank and will in turn make it easier for businesses and private people to borrow money from those banks. | A rate cut will make it cheaper for banks to borrow from the central bank and will in turn make it easier for businesses and private people to borrow money from those banks. |
| Analysis: Robert Peston, BBC business editor | Analysis: Robert Peston, BBC business editor |
| In some ways I thought yesterday's events on markets were if anything more disturbing than Monday's global rout. | In some ways I thought yesterday's events on markets were if anything more disturbing than Monday's global rout. |
| Because if share-price gains could not hold after the significant monetary easing by China's central bank, then mistrust about the true state of the world's second largest economy (actually the number-one economy on the purchasing-power-parity measure of GDP) has become very pronounced indeed. | Because if share-price gains could not hold after the significant monetary easing by China's central bank, then mistrust about the true state of the world's second largest economy (actually the number-one economy on the purchasing-power-parity measure of GDP) has become very pronounced indeed. |
| And another thing, the Chinese interest rate cuts will exacerbate the phenomenon that has caused so much stress in so many different global markets, from commodities, to foreign exchange, to stocks and bond - the fall in the Chinese currency, the RMB, since it was allowed by Beijing to float more freely on 11 August. | And another thing, the Chinese interest rate cuts will exacerbate the phenomenon that has caused so much stress in so many different global markets, from commodities, to foreign exchange, to stocks and bond - the fall in the Chinese currency, the RMB, since it was allowed by Beijing to float more freely on 11 August. |
| Read more from our experts: | Read more from our experts: |
| Robert Peston: China's woes and a still flawed global economy | Robert Peston: China's woes and a still flawed global economy |
| Duncan Weldon: What next for the global economy after China market woes? | Duncan Weldon: What next for the global economy after China market woes? |
| Andrew Walker: How the China share slump affects the rest of the world | Andrew Walker: How the China share slump affects the rest of the world |
| Karishma Vaswani: China counts cost of Black Monday | Karishma Vaswani: China counts cost of Black Monday |
| The BBC's Celia Hatton in Beijing explains that the move is aimed at a long-term effect on the growth of the Chinese economy, rather than at having an immediate impact on investors. | The BBC's Celia Hatton in Beijing explains that the move is aimed at a long-term effect on the growth of the Chinese economy, rather than at having an immediate impact on investors. |
| "They've already said they are not going to intervene on a day-to-day basis in the stock market, but they are going to focus their attention on growing the real economy in the long term." | "They've already said they are not going to intervene on a day-to-day basis in the stock market, but they are going to focus their attention on growing the real economy in the long term." |
| "They hope that this will convince investors that the Chinese economy might be slowing down, but is not in for a hard landing, and that this will over time convince investors and stabilise the market," our correspondent said. | "They hope that this will convince investors that the Chinese economy might be slowing down, but is not in for a hard landing, and that this will over time convince investors and stabilise the market," our correspondent said. |
| Hong Kong's Hang Seng index followed Shanghai's lead for most of the morning, but then traded flat at 21,416.09 points. | Hong Kong's Hang Seng index followed Shanghai's lead for most of the morning, but then traded flat at 21,416.09 points. |
| Given China's central role in world trade, a slowdown in the world's second-largest economy would be likely to reverberate around the globe. | Given China's central role in world trade, a slowdown in the world's second-largest economy would be likely to reverberate around the globe. |
| Read more: The six Cs of the China stock slump | Read more: The six Cs of the China stock slump |
| The stocks fall in facial expressions | The stocks fall in facial expressions |
| Optimism elsewhere | Optimism elsewhere |
| Elsewhere in Asia, the region's largest index, Japan's Nikkei 225 finished 3.2% higher on Wednesday at 18,376.83 points. | Elsewhere in Asia, the region's largest index, Japan's Nikkei 225 finished 3.2% higher on Wednesday at 18,376.83 points. |
| The Nikkei's gains come after a painful week for the Tokyo index, which had shed more than 8% in the past two sessions. | The Nikkei's gains come after a painful week for the Tokyo index, which had shed more than 8% in the past two sessions. |
| South Korea's Kospi index was also in positive territory, closing 2.6% higher at 1,894.29 points, while in Australia, the S&P/ASX 200 finished 0.7% up at 5,172.80. | South Korea's Kospi index was also in positive territory, closing 2.6% higher at 1,894.29 points, while in Australia, the S&P/ASX 200 finished 0.7% up at 5,172.80. |