Did markets over-react to Chinese bears?


Stocks slumps as concern about global growth and losses within the oil industry increases, writes Miro Iliev

20 January saw the plunge of European markets into their lowest levels since 2013. All major stocks decreased by around 2% or more by midday. The biggest losses were suffered by The CAC 40 in France by 3.5% and FTSE MIB in Italy by 3.4%.

The drop was triggered by the slump in Chinese shares, while confidence waned in its government’s ability to manage its domestic economy and markets. Slumps in oil prices also had a great impact. They hit a 13-year low to just $30 per barrel due to an oversupply. Another factor has been the flood of US oil into the market and the overall economic growth drought in the Eurozone and China.

Although 21 January saw a slight recovery within European markets, it has been a turbulent New Year for the old continent, as a weakened Euro and market continue to afflict economic confidence.