China sell-off syndrome shakes markets

European stocks fell for the third time in four days, mirroring declines that shook global equities in August, as they extended the worst start to a year since 2000 amid a China-fuelled sell-off in mining and energy shares.

Europe’s equities have tumbled 5.3 per cent in the first four days of the year, and companies with the most sales in the world’s second-biggest economy are bearing the brunt.

In Ireland, the Iseq Overall Index closed down more than 1.8 per cent at 6,563.78.

DUBLIN

The Irish market was not immune to the global wobbles. Building materials group

CRH

finished down 2.8 per cent at €25.05, Cavan-based insulation panels group

Kingspan

was down 2.4 per cent at €23.80, while

Ryanair

closed 3.9 per cent lower at €14.74 in spite of strong traffic data.

Financial stock also took a hit with Bank of Ireland down 1.8 per cent at 32 cent, FBD down 1.6 per cent at €6.25 and Permanent TSB off 2.8 per cent at €4.52.

Kerry Group was up 1 per cent at €75.49 with traders suggesting the company is seen as a defensive stock amid the current market volatility. Hotel group Dalata finished 1.3 per cent higher at €5.257 after experiencing sell offs in the previous couple of days.

LONDON

More than £30 billion was wiped off British blue chips on Thursday after China allowed its currency to weaken faster than before, rocking global markets and sending commodity shares to their lowest levels for about a decade. However, the index ended off of its lows after China suspended a circuit-breaker on its stock market that traders said was causing – rather than preventing – volatility.

The commodity-heavy FTSE 100 hit a three-week low and closed down 119.30 points, or 2 per cent at 5,954.08.

UK mining and energy shares hit their lowest level in more than 11 years, with metal and crude oil prices knocked by concerns that major consumer China’s economy is even weaker than anticipated.

The FTSE 350 Mining and Oil and Gas indexes fell 4.7 percent and 2.3 per cent respectively.

Shares in Anglo American, Glencore and BHP Billiton fell 5-11 per cent, while emerging market-exposed Aberdeen Asset Management dropped 7.8 percent.

However, oil majors BP Group and Royal Dutch Shell ended the session off their lows as oil prices steadied.

Poundland (which trades as Dealz in Ireland) slumped nearly 10 per cent after the discount retailer said there were fewer shoppers over Christmas, meaning profits would come in towards the lower end of forecasts.

EUROPE

Anglo American

and

Glencore

slid 8.3 per cent or more, pushing a gauge of miners to its lowest level since 2009. Carmakers fell to to the lowest since October.

The Stoxx Europe 600 Index fell 2.2 per cent. It pared losses of as much as 3.6 percent after China’s securities regulator suspended the circuit-breaker that forced local exchanges to shut early for the second day this week.

Germany’s DAX Index lost 2.3 percent to 9,979.85, trading below 10,000 for the first time since October. The Stoxx 600 is on track for its worst week since August, when China’s yuan devaluation sparked a sell-off.

NEW YORK

US stocks extended their three-month lows, with the Dow Jones Industrial Average dropping more than 350 points by early afternoon amid a China-led rout that continued to engulf markets around the globe.

Banks and technology companies paced the retreat, on track for their biggest declines in four months, with Citigroup and Apple down more than 2.7 per cent. Facebook slid 5 per cent, the most since August. Energy companies in the Standard and Poor's 500 Index renewed a decline to a four-year low after an earlier rebound with oil faded.

– (Additional reporting: Bloomberg/Reuters)