Year starts with share market falls

2016 has started badly on international share markets, reportedly led by China after their manufacturing sector contracted again in December.

  • China – down 7%
  • FTSE 100 – down 2.39%
  • Germany’s Dax – down 4.28%
  • Dow Jones – down 2.42% (at 12:33 pm)
  • S&P 500 – down 2.36%
  • Nasdaq – down 2.81%
  • MSCI All-Country World Index fell 2.4 percent by 12:34 p.m. in New York, topping its slide of 1.5 percent to start 2001.

New Zealand’s NZX market opens today at 10 am.

Bloomberg: Global Stocks Tumble Following Shanghai’s 7% Crash

  • Dow Average heads for worst start in at least eight decades
  • Brent rallies on Iran tension, yen rallies on haven demand

The Dow Jones Industrial Average sank more than 420 points as a selloff in Chinese equities spread around the world, fanned by concerns that economic growth is decelerating from Asia to North America.

The U.S. blue-chip index tumbled toward its worst start to a year since at least 1932, while banks and technology shares led the Standard & Poor’s 500 Index lower. A measure of global equities tumbled headed for its worst inaugural session in at least three decades. Emerging markets slid the most since August as slowing manufacturing triggered a selloff that halted Shanghai trading.

Radio NZ: International share markets tumble

Wall Street has continued the rout on global share markets, with the Dow Jones, S&P 500 and Nasdaq indexes all opening more than 2 percent down.

It followed sharp falls in China, where trading on the main stock markets was halted early after indexes tumbled 7 percent.

A survey indicating China’s manufacturing sector contracted again last month was blamed for the falls. Other Asian markets also fell.

Meanwhile, news that Saudi Arabia had broken off diplomatic ties with Iran sent oil and gold prices higher.

Earlier on Monday, trading on China’s Shanghai and Shenzhen stock exchanges was halted for the first time under new “circuit breaker” rules, which are designed to curb market volatility.

The share price falls came after more signs of trouble in the world’s second-largest economy.

Some analysts also attributed the decline in share prices to the imminent end of a six-month lockup period on share sales by major institutional investors, a policy implemented to shore up indexes. Big shareholders may start dumping shares once the ban is lifted on Friday.

Huang Cengdong, an analyst for Sinolink Securities in Shanghai, said: “The market will not improve because there will be heavy selling in the near future.”

An ominous start to the financial markets in 2016.

UPDATE: By the close of the US trading day (Monday) the damage had reduced:

  • Dow Jones down 1.58%
  • S&P 500 down 1.53%
  • Nasdaq down 2.08%

Early in the first trading day for the year on the NZX 50 – down 1.19%

UPDATE: at close of trading the NZX 50 ended up down 0.73%

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9 Comments

  1. Klik Bate

     /  5th January 2016

    The stock market is getting ready for its date with destiny. Wall Street sold their soul and the devil is coming to collect.It will be ugly. You can look forward to something like a 10,000 point plunge in the Dow.

    The bottom line is that the worlds largest financial institutions are hiding enormous derivatives losses that are about to bring down the entire global financial system. Happy New Year!

    Reply
    • Blazer

       /  5th January 2016

      so its just over 17,000 atm…you calling 7000…be the biggest crash ever.Certainly possible.

      Reply
      • Klik Bate

         /  5th January 2016

        Yes it’s certainly possible. In 2007 they BARELY saved the financial system. They called it the Global Financial Crisis.. Yet all the complicated debt entities are still with us – times three!!. Today, the banks are more highly leveraged than ever. And they have wiped out again. This time in oil and the commodities markets.

        It’s worth remembering they weren’t supposed to go broke in 2007/8. So if the system is so safe and sound, why did every financial institution in America need a bail out? The money has gone. There is no way they can be bailed out again. 07/08 was a warning – it can and will happen again. In reality, the banks have taken peoples money and gambled it away in the derivatives casino. They bet on the price of oil and commodities going up and staying there. They bet wrong.

        Reply
  2. Timoti

     /  5th January 2016

    This type of news brings orgasmic delight to Lefties. Those big bad corrupt corporates and rich pricks are going to be taught a lesson.

    And the love will continue until Lefties can’t buy a latte. Or source that supplement keeping their arthritis at bay. Or they find certain internet services become defunct…WHAT!!!!!

    Reply
    • Blazer

       /  5th January 2016

      ‘rich pricks are going to be taught a lesson.’….this doesn’t happen though!Its heads I win,tails you lose.The average investor sees his portfolio crash in value ,while the ‘smart’ money mops up equities on the cheap.A RE crash in the west will have a bigger shock effect.

      Reply
      • Klik Bate

         /  5th January 2016

        Timoti just having his usual uninformed rant. I can only assume he/she hasn’t been onto their broker in the last few months to short the shit out of the markets??

        Dick Smith Holdings being the latest example of ‘rich pricks being taught a lesson’. Yeah, right! Bought by Anchorage Capital in 2012 for $115m. Then partially sold down the following year in an IPO for $520M, Anchorage then sold its remaining 20% in late 2014 for around $2.20 a share. Dick Smith’s 393 stores were put into receivership this morning. The ‘smart’ money looks for a new home – heads I win, tails you lose 🙂

        Reply
        • Alan Wilkinson

           /  5th January 2016

          I’ve been saying for a couple of years that Dick Smith’s business model is dead. No way it can compete with internet sellers.

          Reply
        • Timoti

           /  5th January 2016

          Uniformed rant? I wasn’t talking about the share market, I was talking about a Lefties mindset to such news.

          Guess what….wealthy people can lose big time on the stockmarket. Just like the little man. So why do so many little men enter the share market?

          I bet you have no shares in the market. Just a fast Google search. I have shares in A2 milk, I did have a portfolio. Tasman Pacific and another couple of companies I can’t remember. One went belly up . So I keep things simple. I do not have the skills to commit big time to the market. Nor would I want to.

          ps-I haven’t been to my broker in over a year.

          Reply

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