Finance Finance News China stocks slump 7 per cent

China stocks slump 7 per cent

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China’s Shanghai index plunged nearly 7 per cent on its opening day of trading for the year, triggering an early halt to trading and reigniting fears of a global slowdown.

The Shanghai Composite Index dived 6.9 per cent to 3,296.66 on Monday, the lowest level in nearly three months.

The official Xinhua News Agency said China halted trading on the Shanghai and Shenzhen stock markets after shares tumbled.

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“Those are violent New Year fireworks. That’s quite a way to start the day off,” Janlyn Capital managing director Andre Bakhos told AAP.

“Right now, the focal point is China, the global economic condition, and the fact that we’re coming off a disappointing year on many levels, a frustrating year on many levels, only to walk in and [see this].”

As of Monday, if China’s CSI 300 index moves by 7 per cent, trading is automatically halted for the day.

The slump was widely blamed on unexpected survey data indicating factory activity in the world’s second-largest economy shrank sharply in December. The survey suggested output, employment and new orders had all declined over the month, triggering a wave of selling on share markets across Asia, including Australia.

In early trading on Monday, the Dow Jones industrial average was down 349.78 points (2.01 per cent), at 17,075.25; the S&P 500 was down 37.67 points (1.84 per cent) at 2,006.27; and the Nasdaq Composite index was down 111.77 points (2.23 per cent) at 4,895.64.

All 10 major S&P sectors were lower, led by the 2.4 per cent decline in the tech sector. Apple was the biggest drag on the S&P and Nasdaq, falling two per cent to $US103.16.

Goldman Sachs was down 3.2 per cent at $US174.45 and was the biggest drag on the Dow.

Japan’s Nikkei 225 tumbled more than 3 per cent while Hong Kong’s Hang Seng retreated about 3 per cent.

-with AAP and ABC

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