Spreadex Market Update
Fears over China suffocate markets as European indices hit 7 month lows
Instead continued concerns over China have sent the European indices to 7 month lows
For such a long time Greece was the market moving force, be that positive or negative; now, despite a deal being signed, sealed and delivered, something that has happened against pretty formidable odds, investors have been infected with a fear over China that is outweighing any other (non-interest rate related) news. Another tumble by the Shanghai Composite merely reinforced the idea that the Chinese government is struggling to provide a tourniquet for its headline index, and caused the markets to open to more widespread losses after the bell.
The DAX and CAC are both in the doldrums, whilst the FTSE is less than 100 points away from a fresh 2015 nadir. The commodities were going through the motions of a nascent rebound, but quickly begun to return to besting their current 6 year lows. That fact is painfully clear for the UK’s oil and mining stocks, which by and large opened to some sizable declines. The mining sector is currently slightly healthier than the oil stocks, but that appears to be purely because of gigantic gains for KAZ Minerals, which jumped over 15% this morning following the devaluation of the Kazakhstani tenge.
Improved UK retail sales is all the FTSE has to look forward to this Thursday, and given the excessively bearish tone of the markets at the moment the figure is unlikely to persuade investors that they should take on any risk.
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