Global stocks dive on China fears
January 4, 2016, 10:16 pm

US, Asian, Chinese and European stocks all tumbled on the first official trading day of 2016 [Xinhua]

Both the Dow Jones Industrial average and S&P 500 fell over 1.5 per cent by end of trading on Monday.

The Nasdaq, which was the best performer of 2015 among the three, dipped a full two per cent on Monday.

Adding to the tumult is the sectarian tension that has been exacerbated by the break in ties between major oil producers Iran and Saudi Arabia over Riyadh’s execution of a prominent anti-government Shia cleric.

Oil prices, as they traditionally do, rose on the new Middle East tensions: International benchmark Brent Crude was up 0.27 per cent by end of trading Monday, but the US benchmark West Texas Intermediate was down 0.38 per cent.

The sell-off in US stocks follows poor manufacturing data from China.

The benchmark Shanghai Composite Index fell by 6.8 per cent on Monday on news that Chinese manufacturing had slowed even further in December.

The Caixin General China Manufacturing Purchasing Managers’ Index (PMI), an indicator of manufacturing activity, edged down to 48.2 in December from November’s 48.6 per cent, a private survey showed Monday.

China has been reeling from a weakened global commodities market, and surveys across Asia this week showed industry throughout was struggling with slack demand.

Not surprisingly, Asian stocks also felt the downward pinch.

South Korea’s Kospi was down more than two per cent. Hong Kong’s Hang Seng was down just under 2.7 per cent, while Japan’s Nikkei took a three-percent tumble.

India’s BSE (Bombay Sock Exchange) benchmark Sensex also fell 2.05 per cent on Monday.

Australia’s ASX, however, was up 0.54 per cent.

In Europe, London’s FTSE was down 2.38 per cent; France’s CAC40 was down 2.47 per cent and Germany’s DAX was among the continent’s worst performers plummeting 3.62 per cent.

The BRICS Post with inputs from Agencies