“Drowning In A Sea Of Red”: Global Markets Plunge As European Tech Stocks Crash; Chinese Rout Returns

Tuesday, October 23, 2018
By Paul Martin

by Tyler Durden
ZeroHedge.com
Tue, 10/23/2018

Yesterday morning, Morgan Stanley declared that the “dead cat bounce is over. One day later, the bank’s thesis was confirmed with global markets a sea of red on Tuesday, as a violent rout in Asia carried over into Europe, slamming tech and industrial stocks, and crossing the Atlantic, sending US equity futures retesting the lowest level hit during the October 10/11 two-day rout.

An ugly start to European trading pushed world shares towards their lowest level in a year on Tuesday, as negative drivers from Saudi Arabia’s diplomatic isolation to worries about Italy’s finances, trade wars and a slew of ugly earnings piled on the pressure.

Selling escalated from Wall Street into a heavy selloff in Asia before hitting Europe, which was facing a fifth day of uninterrupted declines.

One day after relentless Chinese jawboning sent the Shanghai Composite surging 4.1%, its biggest gain in two years, Chinese stocks resumed their slide as traders overpowered Beijing much to the surprise of professional traders, especially after Beijing announced fresh measures to ease the funding strains of private companies, as top officials – including president Xi – sought to restore confidence in the world’s second-largest economy. The State Council announced it would support bond financing by private firms, and said the central bank will provide funding to facilitate this. It was not enough however, and the Shanghai Composite resumed its slide, dropping 2.3% overnight and reversing more than half of Monday’s gain, while China’s CSI300 tumbled 2.7%.

The sudden, sharp moves in Chinese stocks in either direction have made the Shanghai Composite the most volatile world index, as vol spiked to the highest level since March 2016.

Despite the return of China’s rout, the yuan was little changed and stood near Monday’s 21-month low, trading at 6.9464 per dollar in the onshore market on expectations China will pursue looser monetary policy to cope with pressure from U.S. President Donald Trump on tariffs.

“This morning weaker stocks in Asia raised some eyebrows and overall sentiment is suffering from trade tensions, Italy to Brexit; a concoction of concerns,” said ING strategist Benjamin Schroeder.

Asia’s overnight tumble gave back much of the ground the region had clawed back over the last two sessions with MSCI’s index of Asian shares dropping 2.1% to a one and a half year low and on the verge of a bear market…

The Rest…HERE

Comments are closed.

Join the revolution in 2018. Revolution Radio is 100% volunteer ran. Any contributions are greatly appreciated. God bless!

Follow us on Twitter