China, oil sink stocks

Overnight, European shares fell sharply, while USA stocks ended 2% lower after China allowed the biggest fall in the yuan in five months, and trade in Shanghai stocks was halted for the second time this week. The stock circuit breaker responsible has since been abandoned by Chinese authorities.

The Australian market had by earlier today notched up losses of more than 6 per cent this week alone, nearly reversing the gains from a Santa rally at the end of December.

United Kingdom mining and energy shares hit their lowest level in more than 11 years, with metal and crude oil prices knocked by concerns that major consumer China’s economy is even weaker than anticipated.

At 5.76%, the weekly decline also marks the worst start to a trading year on record.

“Its a very volatile environment at the moment”. On the futures market the SPI is 63 points down.

Britain’s FTSE 100 was more than 2% lower at 5947.09 points in early trading, while France’s CAC 40 lost 2.4% and Germany’s DAX 2.7%.

In Ireland, the Iseq Overall Index closed down more than 1.8 per cent at 6,563.78.

Shares in Anglo American, Glencore and BHP Billiton fell 5-11 per cent, while emerging market-exposed Aberdeen Asset Management dropped 7.8 percent.

Financial stocks were the biggest drag on the index, with Commonwealth Bank of Australia down 1.7 percent, National Australia Bank down 1.4 percent, Australia and New Zealand Banking Group down 0.5 percent and Westpac Banking Corp off by 0.3 percent.

Earlier today the Dow Jones Industrial Average sank 393 points, or 2.32 per cent, to 16,514, the S & P 500 slid 2.37 per cent to 1943 and the Nasdaq Composite index retreated 3.03 per cent to 4689.

As opposed to Thursday’s session where every sector bar gold finished in negative territory, the performance on Friday was mixed with losses in financials, utilities and telecommunications partially offset by strength in materials, energy and healthcare.

In economic news, retail sales data released from the Australian Bureau of Statistics showed an 0.4 per cent increase in retail turnover, in line with forecasts.

Stocks around the globe are reeling from fallout from the Chinese stock market and a devaluation of its currency.