London companies recover late on after Chinese Central Bank intervention.
It was a tale of two halves... bisected again and again until you couldn't really tell what was up and what was down in the markets today. The benchmark Shanghai Composite Index plunged another 7.6 per cent, totalling 15 per cent since yesterday morning; that leaves China down 42.6 per cent from the heady heights of June.
It looked as though The People’s Bank of China had given up on intervention, but in an un-signalled move benchmark interest rates were cut by a quarter of one per cent in a bid to boost liquidity and lending and encouraging Western markets.
The FTSeurofirst 300 index – made up Europe’s largest companies – managed to claw back £200bn from £500bn lost on Monday.
The FTSE 100 is up 3 per cent recovering swathes of Black Monday's losses, with business leaders and columnists criticising Beijing and advising caution. Likewise the German DAX and the French CAC are both up over by 4 per cent. Wall Street is rallying with the Dow Jones up 2.4 per cent following last night’s spectacular tumble and recovery which saw the index of America’s biggest companies suffer the largest one-day fall in its history, only recouping late on to a dismal -6 per cent.
To put some of this in perspective, the world’s richest 400 people lost a collective $124 billion in Monday’s market turmoil according to The South China Morning Post.
Once the dust had settled Alibaba founder Wang Jianlin and Microsoft’s Bill Gates lost over $3 billion each.
But at the time of writing the Dow Jones is on an upswing of confidence leading some to name the today as "Turnaround Tuesday", fuelled in part by a recovery in tech stocks. Apple is up 5.5 per cent and Facebook 4.78 per cent after they and the likes of Twitter yesterday opened around 10 per cent down.
The news was not so good for Netflix – a company whose streaming accounts for 30% of all US prime-town internet activity - which dropped a further 11 per cent yesterday, adding to the previous 14 per cent scythed off last week. That means that in just three days 25 per cent has been wiped off the VoD platform’s value.