Markets in Asia and Australia have been dragged into a global equities slump.
Overnight Wall Street suffered its biggest fall in 18 months with the S&P500 losing 2.1%. In Europe, investors sold down after seeing more disruption ahead with new elections planned for Greece.
Asia followed the slide, with Shanghai down 3.7% , Hong Kong’s Hang Seng losing 2.67%, Japan’s Nikkei 2.7% and Korea’s KOPSI 1.8%.
While all these losses are large, traders are getting nervous at the persistence of the weakness in Tokyo, down for the past four days.
And Hong Kong stocks are having their sixth down day in a row.
In China, there was more bad economic news with a local measure of manufacturing activity falling to a six year low. The PMI from Caixin Media and Markit Economics was at 47.1 for August against analyst expectations of a print of 47.7.
In Australia, the S&P/ASX 200 index fell below 5200 points for the first time since December. A short time ago, the index was at 5,179.90, down 108.68 points or 2.06%.
The four big banks all lost ground, with Australia’s oldest company Westpac down 3.8% to to $30.95.
Shane Oliver, chief economist at AMP Capital, says markets are at risk of a further correction in the next few months.
“We are still in a seasonally weak period of the year for shares, uncertainties regarding China and the emerging world are likely to intensify in the short term posing risks for global growth and the US share market looks like it’s finally joining in the correction,” he says. “Worries also remain regarding the Fed ahead of its September meeting.”
Over the last week, the global share market correction was driven by worries over China, global growth and the ongoing fall in commodity prices.