Global markets rebounding after ‘Black Monday’

The Shanghai Composite Index was down 4.3 percent at 3,071.06 at midday Tuesday after falling 6.4 percent in the first minutes of trading.

Investors stampeded out of shares after a grim “Black Monday” sparked mayhem in global financial markets but failed to prompt fresh rescue measures from Beijing.

Most stock markets around the world gained Tuesday, as the recent global market rout showed signs of easing.

Investors are also unnerved by uncertainty over US monetary policy.

In early trading in Europe, France’s CAC-40 advanced 1.5 per cent to 4,449.93, rebounding from the previous session’s 5.4 per cent loss. “There is therefore little that” American, European or Japanese central bankers “could do to lift the market risk sentiment”.

The TAIEX in Taiwan added 3.58% while the KOSPI in South Korea rose 0.92%.

“With such an unreasonable sell-off, they (regulators) should at least encourage the market and step up”, said Zhang of Haitong Securities.

The bank also increased the amount of money available for lending by reducing the minimum reserves banks are required to hold by 0.5 percentage points.

The continued selloff came amidst reports from Chinese state-run media outlets that the government may be pulling back its support for the nation’s stock market. The Shanghai stock index slumped 7.6 percent, on top of Monday’s 8.5 percent loss.

Calm in the U.S. market shattered last week, with volatility soaring by the most on record as the Dow entered a correction and investors dumped the biggest winners of 2015.

The Nikkei-225 index at the Tokyo Stock Exchange dropped 643.80 points to 17,896.88 in early trade, following a 4.61 per cent slump on Monday, when it saw its lowest finish in six months.

London’s top-flight was more than 6%, or 400 points, lower during the session as contagion from China’s growth slowdown spread across the globe.

The heavy fall in share prices worldwide over the past week has sharply reduced expectations of a U.S. rate hike in September, but the outlook is far from clear.

The euro rose as high as $1.1715 while the yen strengthened to ¥116.15 to the dollar.

In commodities front-month WTI futures are up by 1.57% at $38.84 while spot gold is slightly softer, trading at $1155.2 an ounce.

China’s fall was the latest in a series of jarring declines that have defied multibillion-dollar government efforts to stem a slide in prices following an explosive market boom.