As for Greece, as Ambrose Evans-Pritchard noted in The Daily Telegraph, we may have reached “a cataclysmic end that nobody planned, nobody seems able to escape, and that threatens to shatter the great European order in the process”. However it’s unlikely to seriously affect USA investors because they have limited involvement in China‘s largely hermetic markets. MSCI largely cited the lack of access for foreign investors to China‘s market as the reason to continue to keep China out of its indexes.
ASIA SCORECARD: The Shanghai Composite in mainland China surged 5.8 percent after initially opening sharply lower.
You borrow money from a broker to buy the stock and this can amplify your gains in a rising market.
“We’re cautioning investors not to get too concerned”, said Alec Young, an investment strategist at Oppenheimer Funds.
Young thinks that the problems in Europe and China are not expected to do a huge amount of damage to the two economies in the long run.
KEEPING SCORE: The Dow Jones industrial average declined 185 points, or 1 percent, to 17,588 as of 10 a.m. Eastern time.
“While there are disaster victims everywhere in China‘s stock market, the other scene is that the “national team” is truly taking action”, the paper said.
“If people aren’t allowed to sell, of course (the market’s) not going to go down”, said Frederick. Daiwa said in a statement that trading will be halted “for the time being”, citing low liquidity.
The Shanghai Composite Index closed at 3,709.33, up 5.8 percent, after swinging 375 points, while the tech-heavy Shenzhen Component Index gained 4.3 percent to 11,510.34.
On Wednesday, government-backed China‘s Securities Finance Corporation – known as CSF – announced that it will lend billions to big Chinese brokerage firms so they can buy more stocks.
The market meltdown has come at a much faster pace than most have expected.
Heavyweight financial stocks rose.
BONDS AND CURRENCIES: Bond prices fell, pushing up the yield on the 10-year Treasury note up to 2.28 percent from 2.20 percent on Wednesday.
Walgreens Boots Alliance logged the biggest gain in the S&P 500. Unfortunately, the economy has been slowing so companies earnings prospects have deteriorated.
The worldwide Monetary Fund (IMF) has cut its forecast for global growth this year.
Amid growing criticism over the sharp fall diluting an unprecedented over $3.2 trillion worth of capital from the market, vice-minister of public security Meng Qingfeng led a team and visited the head office of China Securities Regulatory Commission (CSRC) warning severe punishment for the violators of laws and regulations. Close to half the Hang Seng Index, including companies from HSBC Holdings Plc. to New World Development Co., trades below book value.
ENERGY: Benchmark USA crude fell rose 16 cents to $51.81 a barrel in electronic trading on the New York Mercantile Exchange.
In metals trading, silver rose 19.8 cents to $15.35 an ounce.
The crash resulted in sharp falls in the prices of copper and iron ore – the raw component of steel – putting pressure on mining firms in Australia and Brazil. The euro slipped to $1.1105 from $1.1072.