Black Monday for global markets

NEW YORK: Global markets entered a new day of carnage Monday amid a continuing worldwide sell-off, extending last week’s meltdown and stoking new fears over how far financial markets will drop.

The Dow Jones industrial average plummeted more than 1,000 points, or more than 6 percent, at its 9:30 a.m. open, its worst start since the global financial crisis, before recovering to a 600-point loss around 10 a.m. The biggest drop for the Dow, an index of 30 large companies, was 777 points in September 2008.
Commodity prices hit new lows extending a Chinese-led rout, fed by fears of a damaging slowdown in the world’s second-largest economy.
Chinese stocks have tumbled since peaking in mid-June and authorities have launched broad interventions to try to restrain the drops, but Beijing’s latest market intervention has failed to restore confidence.
Several European markets sank more than seven percent in afternoon trades.
“There is no doubt that the panic begets panic in this market,” Michael Holland, chairman at Holland & Co., said in a Bloomberg Television interview, calling it “Black Monday” and adding “it’s a psychological thing. It’s pervasive. It’s everywhere.”
China-linked shares again led the stocks sell-off Monday, with Shanghai closing down 8.49 percent, the biggest daily loss since February 27, 2007.
Falling oil prices also weighed on market sentiment as they slid below $40 a barrel for the first time since 2009, after weak Chinese manufacturing data deepened fears that the Asian giant is growing more slowly than thought.
Global equities have lost more than $5 trillion since China’s shock currency devaluation on Aug. 11.
“The fog of fear over the state of the Chinese economy is only thickening, and with little in the way of non-Chinese news to come, the markets are going to struggle to escape today without some fairly ugly scars,” said Connor Campbell, a Spreadex financial analyst.
In Europe, London’s benchmark FTSE 100 index sank 4.67 percent to close at 5,898.87 points.