Chinese shares slump 6.4 percent to 14-month lows

This year has not been good for Chinese stock markets at all, as trading was halted on January 4 and 7, after there was a sharp fall in the market.

The benchmark Shanghai Composite Index dropped 6.42 percent, or 188.73 points, to close at 2,749.79, which, according to media reports, is the lowest level since December 2014.

Shanghai’s stock market slumped more than six percent and European stocks declined as oil prices dipped Tuesday, reversing a brief global rally on hopes of fresh central bank stimulus.

Analysts said Tuesday’s slide in the mainland stock market is a reflection that the market is still going through a correction period after earlier volatility, and ongoing “pessimism” about global and domestic economies also contributed.

Trading volumes have thinned as many investors have given up on Chinese stocks since last summer, when shares crashed 40 percent.

Beijing intervened to stem that rout and orchestrate a recovery of sorts, but anyone who mistook that for a bottom and bought back in is nursing losses again.

British no-frills airline Easyjet on Tuesday forecast a jump in annual profits as low oil prices slash the cost of jet fuel, which is refined from crude.

The drop comes after a sell-off in the United States on Monday that caused oil prices to fall below $30 a barrel, reported Reuters. Dong said he predicts a 6.5-6.7 percent growth this year.

China’s fourth-quarter economic growth slowed to the weakest since the global financial crisis, increasing pressure on a government struggling to regain investors’ confidence after perceived policy missteps jolted global markets. The Fed is expected to leave interest rates unchanged later on Wednesday and acknowledge that turmoil in financial markets threatens its upbeat view of the USA economy, leaving the chances of a March hike diminished but alive. After U.S. cash markets closed, Apple Inc. forecast a decline in sales for the first time in more than a decade, adding to evidence that the market for smartphones is becoming saturated and that expansion in China is no longer enough to maintain the company’s unprecedented run of growth.

Investors remain wary of further yuan weakness, though the PBOC has kept the currency’s daily midpoint fixing little changed since spooking the markets with a sharply weaker fix in early January.

The central bank has been making plenty of liquidity available to the banking system to avoid any cash squeeze ahead of long Lunar New Year celebrations beginning in early February. “Too many people want to get their money out”.

Mowat’s forecast for last year’s capital outflows from China compares with a figure of $1 trillion estimated by Bloomberg Intelligence.