Markets across Asia plunge to a new low, erasing almost all the profits earned this year so far. China’s stocks are the most affected, plunging the most since 2007 as government stimulus failed to allay investors’ concerns regarding the world’s second-largest economy.
The shanghai composite lost 8.49 percent to 3,209.91 at 03:29:33 p.m. China’s local time. In Hong Kong, Hang Seng Mainland 100 I plunged 5.80 percent to 6,249.33 at 04:01 p.m. on Monday. S&P / Hong Kong GEM Index lost 14.65 percent to close at 424.28.
Japanese Topix 500 Index plunges the most in a single day since February 2014, losing 5.84 percent at 02:00:03 p.m. local time. Banks also declines, with embattled Mitsubishi UFJ Financial Group Inc. losing 7.5 percent, while Toyota Motor Corp. lost 4.8 percent. The energy explorer Inpex Corp. dropped 3.3 percent as crude oil continues to fall, currently at $38.82 to a barrel.
According to Bloomberg “Worsening economic data and signs of capital outflows are undermining unprecedented government attempts to shore up the country’s $6 trillion stock market”.
Chen Gang, a Shanghai-based chief investment officer at Heqitongyi Asset Management Co. said “This is a real disaster and it seems nothing can stop it”
Deutsche Bank says the meltdown in global markets is “very serious” as it would dampen prospects for growth worldwide.
Since China’s unexpected currency devaluation on August 11, global stocks have lost almost $5 trillion in value with investors wary of further decline in the second-largest economy.
The U.S dollar gained 0.50 percent against the struggling Canadian dollar in the Asia session, reaching 1.3271, an 11 years peak once reached in 2004 before the global recession.