Trading Halted in China… AGAIN!
The China Shanghai Composite Index has halted trading for the second time in a week, as fears about a slowdown in the Chinese economy weigh heavily on investors minds and cause the index to fall by 7.32%.
Recently introduced Chinese circuit breakers kicked in as speculation grows that another devaluation of the Yuan could be on the cards, causing investors to fear that the slowdown in the Chinese economy could be more serious than they had previously feared. The new circuit breakers themselves have also created new trading conditions, which may be panicking investors.
Oil Continues Slump
Oil also continued its demise as NYMEX Crude headed towards $33 a barrel, as Middle East tensions failed to spook investors and the global oil glut continues to be the main fear in investors minds as they try to predict the future price of oil and its potential effects on global markets as a whole. The global economic outlook – including the perceived Chinese economic slowdown – continues to send the oil price south.
A Rocky Start to 2016
Today’s events continue a theme which has so far been set for 2016, which could imply a turbulent year could be in store for global stock markets. The first rate rise in almost a decade from the Federal Reserve and fears of a slowing Chinese economy could continue to spark volatility in the markets for the months ahead. Previous years have also shown that the month of January can prove to be a pivotal month when trying to predict how stocks are likely to perform for the rest of the year.
North Korea Weighs In
Another fear for stock markets in 2016 is the threat of global terrorism. Last year saw unprecedented terror from the organisation known as ISIS and today it seemed that North Korea decided to weigh into the fray, announcing that it has successfully tested a hydrogen bomb, raising tensions in the region. There is some speculation as to whether these reports are to be taken as read, but it is yet another threat to global security which simply cannot be ignored.
These quite dramatic events at the start of 2016 have really left investors wondering which way to turn. With global concerns over security, economic growth and also a move to return US interest rates to a perceived ‘norm’, 2016 has the potential to be a somewhat turbulent year on financial markets.
What do you think 2016 holds for financial markets?