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China selloff sparks gloomy 2016 start for stocks

Posted on Jan 4, 2016


Global equity markets fell on Monday while gold and bonds rose after a 7 percent slide in Chinese shares, sparked by weak economic data, rekindled worries over global growth on the first day of trading in 2016.

Rising tensions in the Middle East also increased demand for safe-haven assets. Global benchmark Brent crude rose above $38 a barrel as some speculated a breakdown in diplomatic ties between Saudi Arabia and Iran could result in oil supply restrictions.

Worries that the weak Chinese data could portend slower world economic growth hurt Wall Street and sent key indexes down more than 2 percent in early trading.

The Dow Jones industrial average fell 351.01 points, or 2.01 percent, to 17,074.02, the S&P 500 slid 38.46 points, or 1.88 percent, to 2,005.48 and the Nasdaq Composite lost 127.45 points, or 2.55 percent, to 4,879.96.

China’s yuan currency hit its lowest in more than four years after the central bank lowered its guidance rate and factory activity contracted for a 10th straight month in December, at a sharper pace than November.

Stocks in Europe fell sharply, with Germany’s DAX index tumbling 4.0 percent and the pan-European FTSEurofirst 300 index slipping 2.4 percent.

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