We generally enter 2016 as a new start having a fresh year in front of us, however, it appears China has missed this New Year memo!
The concern over Chinese markets impacted on worldwide stocks and shares in 2015, the start of 2016 has witnessed much the same story. The Shanghai Composite sector fell 7% on the 4th of January, prompting suspensions rules after just thirty minutes of trading. The same market recovered on the 6th, finishing 2.3% up, however, on the 11th there was renewed fears.
In America, the Dow Jones and S&P 500 adopted this news from China at the beginning of January with 2.3% declines, and the FTSE 100 fell by 2%. On the whole, the FTSE 100 dropped more than 5% in the first week of the year, however news at the beginning of the next week only caused the marketplace to flutter a little, at the close on Monday 11th UK Markets were down 0.69%, having been in and out of positive returns throughout the day.
The fears around China’s markets seem set to carry on into this year. The government of China and People’s Bank of China are using interventionary processes to impact the market, with each and every one of such interventionary measures are then getting assessed both by China’s markets and global markets with regards to their effect on economy the overall.
Press reports throughout the first week of January revealed that the People’s Bank had made currency weaker to improve exports. In the 2nd week of January, further stories suggested the bank is spending considerable amounts to purchase Chinese Yuan, possibly to steady their Stock Market. Both moves raised concerns regarding exactly what state their economy is presently operating in.
No matter what answer, it’s a certainty that China will continue to be a hot topic through 2016, while the second largest economy in the world figures out the shifting demands on imports, exports, building plus much more.