How do you survive a Bear Market crash?
The Chinese stock market plummeted by its largest margin since 2007 this morning. The Shanghai Composite Index fell over 8.5% this morning, kickstarting a string of losses and sell offs across global markets. Local media outlets in China are calling it “Black Monday”.
Japan’s Nikkei tumbled 4.6%, the largest one-day decline since June 2013 while the Australian Securities Exchange had its biggest one-day sell off in over 6 years.
The Footsie is currently down 4.5%, skimming off another £60bn from the top 100 companies to add to the £41bn lost last Friday. Europe has been squeezed too.
“Mayhem in the European markets this morning, as €230bn has been wiped off the pan-European FTSEurofirst 300” – Tara Cunningham, Telegraph.
Both the FTSE and the DAX have reputedly reached “bear market” status – the name given to markets where share prices are falling rapidly, encouraging selling.
Leading the losses in Europe are basic resource stocks particularly in mining following concerns about the impact of China’s economic slowdown and a drop in factory output: China is its biggest single destination market. Shares in Anglo American and BHP Billington are down 7 per cent and miner and commodities trader Glencore is at minus 8 per cent. The Nasdaq lost 8.5 per cent in US markets and the Dow Jones fell 6.4 per cent.
The knock on has hit oil too. West Texas Intermediate crude and Brent crude have both hit their lowest level in six years, down 3.5 per cent at $39.05 for WTI and 3.9 per cent at $43.41 for Brent.
However the yen has gone up 0.6 per cent to 121.3 per US dollar. Investors are treating it as a haven asset amongst the market turmoil in the surrounding area.
According to Bloomberg, more than $5 trillion has been wiped off the value of global stock markets since Beijing devalued the yuan two weeks ago.