Stock markets across the globe fell sharply today as a direct result of China's "Black Monday" where the biggest one-day plunge in eight years was recorded amid fears of an economic slowdown and a degree of panic selling from millions of individual traders.
Last Friday, China, the world’s second biggest economy, reported its worst manufacturing results since 2008 after having devalued its currency in a shock move earlier in August.
The devaluation of China’s yuan sheared more than $5 trillion from the value of global stocks, raising concern over a global economic slowdown and saw central management of the economy start to unravel.
China's Shanghai Composite index has fallen by nearly 40% since June having risen over 140% in 2014 on the back of China's insatiable quest by individual traders to make a quick million.
European shares had their worst day since 2008 with Portugal’s PSI 20 losing nearly 8% as did the principal European stock markets. The U.K.’s FTSE 100 Index closed at its lowest level since 2012 and dropped below 6,000.
“Everyone seems to be selling off, and there’s panic,” said Michael Woischneck who oversees $7.1 billion at Lampe Asset Management GmbH in Dusseldorf. “There’s no rational choice anymore, no rational reaction.”
By mid-afternoon the Portuguese stock market had dropped to 4907.92 points, the lowest since January 7th this year when the index bottomed out at 4606.25 points.
Lisbon led the losses in the European markets, the PSI 20 was down 20% from its recent high point, with Paris and Frankfurt losing 7% and the Greek stock market falling 11% adding to Tsipras' woes.
Pharol, the former Portuguese Telecom, was out there in front, falling more than 7% and adding further pain to its investors still reeling from its 70% share collapse resulting from the failure of Espírito Santo Group’s Rioforte to repay over €850 million last summer.
Banif, Sonae and Jerónimo Martins all fell by over 6% with Galp Energia, BPI, BCP and CTT losing over 5% in hectic trading.
Tonmorrow is another day and traders will look at good performing yet devalued stock as the world starts to recover from China's overdue 'readjustment.'
Comments
Well shown by Portugal's abysmal record of effectively integrating European Union inward investment to help grow its perennially static economy. Doing everything possible to hamper, delay and discourage anything legal and licensed. Ignoring or diluting any regulations and directives from Brussels that attempt to move Portugal more towards the rest of the EU.
Equally China will be well aware of this skew and its grip on Portuguese thinking. Portugal - a country often described as, not so much a Trojan Horse to the EU but the 'Trojan Horse handlers'. Opening the EU up, without anything more than 'Portuguese standards of regulation' so none; to China, Brazil and its ex-African colonies. And leaving us to deal with these non-EU outsiders standards of regulation.