Global markets slump as a ‘poisonous brewing cauldron’ of risks spooks investors – Finance

  • Global markets are falling again after a brief two-day reference rally.
  • “A poisonous brewery with geopolitical and economic problems” is to blame for the fact that risk sentiment seizes investors.
  • Losses led by Asia, which in almost all major indices fell by more than 2% on Tuesday.
  • Europe will do, and Germany's DAX will fall by more than 1.2%. US futures also point to significant losses.
  • You can follow the latest developments in global markets at Markets Insider.

World markets fell again on Tuesday, as the two-day relief continent of the continent ended abruptly, thanks to a cocktail of negative drivers.

All major Asian indices lost their positions on Tuesday, and FTSE China A50 lost the most, falling by more than 3%. Other mainland indices lost more than 2%, while the Shanghai and Shenzhen Composite index declined by about 2.2%.

However, the losses were not contained in China, but the Japanese Nikkei lost 2.7%, and the Hong Kong Hang Seng fell by almost 3% after a sharp drop in closure.

There was no single catalyst for losses, with growing geopolitical tensions between Saudi Arabia and the West over the death of journalist Jamal Hachosggi, fears arose again about President Trump’s trade war and overall weakening confidence in the Chinese economy was partly to blame.

“Large fluctuations in the Chinese markets continued, and the previous two-day rally turned sharply upside down. After reviewing China’s stimulus plans, the market sees these stimulus measures soften the fall, rather than stimulate the economy, ”said Jasper Lawler, head of research at the London Capital Group, said in a morning briefing.

“It was too much for the markets on Tuesday. The poisonous brewery with geopolitical and economic problems led to the fact that one of them was opened as a nuance, because it was red, ”added Spreadex analyst Connor Campbell.

Fears abound that sales in China may worsen because The wave of forced sale of shares is kicking for Chinese companies that use their shares as collateral loans.

In accordance with Bloombergabout 4.18 trillion yuan ($ 603 billion) of shares were issued by founders and other major investors as collateral for loans, which account for about 11% of the capitalization of the country's stock market, based on calculations using the depository of China's securities and clearing Corporate data.

South China Morning Post, citing a report by Tianfeng Securities, said earlier this weekmore than 600 shares of the company fell to levels where forced sales may occur.

“This is a vicious circle: a fall in stocks leads to liquidation, and liquidation leads to a further decline in the share,” said Wang Zheng, Chief Investment Officer at Jingxi Investment Management South China morning post last week.

European stocks also fell victim in the first hour of trading, although not as serious as in Asia. By 8.40 m. BST (3.40 mt.), The German DAX fell by 1.2%, and the FTSE 100 index in the UK was 0.7% lower. The overall Euro Stoxx 50 fell by 0.8%.

“The mood continues to gain momentum due to a combination of geopolitical tensions, including the growing isolation of Saudi Arabia, Italy’s defiant stance towards the ECB and Brexit,” said Lawler.

US futures also point to large losses when markets open in the US, and the Nasdaq points to a 1.1% loss of discovery, while the S & P 500 and Dow Jones look about 0.9%.

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