All eyes were on Asian markets as they opened following Monday’s catastrophic dive by Chinese shares of nearly nine percent – the biggest one day fall since 2007.
Shanghai’s stock exchange was one of the first to start trading and almost immediately sank more than six percent, but other markets outside China seemed more calm.
Monday’s global sell off follows weeks of jitters over the extent of China’s economic slow down.
Max Wolff, Chief Economist, Manhattan Venture Partners explained:
“We’ve seen currencies start to crack and we’ve also so seen China, the fastest growing, large economy, this caboose that historically became the locomotive of global growth has suddenly gone from a reason to be optimistic to a reason to be terrified. And that’s cracked confidence which was probably a little bit overdone.”
Investors are worried about firms which rely on high demand from China. It’s the world’s second largest economy and the second largest importer of both goods and commercial services.
And the eurozone ill prepared for another economic hit as it has yet to recoup its output lost in the 2008 financial crisis.