Global stock markets continued their miserable start to the year on Tuesday, as intervention by the Chinese government failed to prevent further declines across Asia and beyond.
China’s Shanghai Composite, which plunged 6.86 per cent on Monday on worse than expected manufacturing data, fell by as much as 3 per cent on Tuesday, in spite of a spate of share purchases by Chinese government funds intended to shore up prices.
The index recovered in late trading to close down just 0.26 per cent, but this provided little comfort to either regional or international investors, with most global indexes ending in the red, even if declines were less severe than those on Monday.
“There’s uncertainty globally over whether Chinese authorities have the firepower, or perhaps more worryingly, have the will to use it, to shore up the stock market and the wider economy,” said Jasper Lawler, a markets analyst with CMC Markets in London. “Government-directed funds were buying up equities, and the fact that the market closed relatively flat despite that implies that individual investors were overwhelmingly selling. There’s only so long the market can carry on like that before more measures are needed.”
The Hang Seng of Hong Kong finished 0.6 per cent lower, while Japan’s Nikkei closed 0.42 per cent lower. South Korea’s Kospi, however , bucked the trend to close up 0.61 per cent.
Stock exchanges in Europe bounced back in early trading after Monday’s sell-offs, but quickly erased gains to end largely in the red.
Arabian Gulf bourses followed the general downwards trend, with the notable exception of the Abu Dhabi Securities Exchange General Index.
Strong performances by banking stocks such as FGB and ADCB helped shares in the capital rise 1.61 per cent to propel its bourse up 1.61 per cent to 4,283.55, making it the best performing index worldwide, even as volumes remained low.
At the other end of the spectrum Qatar closed 0.82 per cent lower, while Saudi shed 0.66 per cent.
The Dubai Financial Market General Index closed 0.18 per cent lower at 3,078.73, with gains by Amanat Holdings and Emaar Malls cancelled out by declines by Air Arabia and Dubai Islamic Bank.
Crude oil futures drifted lower in afternoon trading, Brent crude futures trading down about 15 US cents at about $37.07 per barrel.
jeverington@thenational.ae
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