The biggest crisis after 2008 has reached. From Japan to US, financial markets and commodity prices have crashed down by the latest turn of faults in Chinese economy. Leading the scoop in stock markets, the Chinese Shanghai Composite Index has fallen by 8.5%; its biggest fall since 2007.
Stock markets in Europe, US and Asia- all have recorded value collapse in response to the negative news from China.
Over the last one month, the Chinese economy was showing symptoms of crack. Stock market value has come down by nearly five percent on many trading days. Worst is that every official attempt to arrest the market fall had failed.
Financial markets are reading that China can’t give momentum to world economy by continuing high growth rate. In the commodity market, low growth prospects and untamed crisis in Chinese financial markets are bringing down prices. Crude and metals including gold have shed value today.
In India, the Sensex has lost nearly 6%, shedding 1600 points approximately. Declined in major share markets are shown below.
Shanghai Composite -9%
Asia pacific region -5.1%
Nasdaq (US) -2.3%
Economists are expecting that Chinese stock crash may deepen the present phase of recession in the global economy. Besides, the use of devaluation strategy by China to arrest fall in growth is a desperate measure. It may produce competitive devaluation in other countries and currency war. Altogether weakening economies and free falling stock prices are indications that something big adverse trend is configuring at present –this time the origin is China.