Stock Rout Spreads Through Europe After China Plunge

[marmar]

(Bloomberg) A wave of selling gripped global markets as the rout in all but the safest assets deepened.

Chinese shares tumbled by the most since 2007, stocks in Germany headed for a bear market and commodities fell to a 16-year low. Russia’s ruble led a selloff in emerging-market currencies, while the yen strengthened and 10-year Treasury yields slid below 2 percent for the first time since April. Futures signaled U.S. equities will retreat for a fifth day.

“Everyone seems to be selling off, and there’s panic,” said Michael Woischneck who helps oversee the equivalent of $7.1 billion at Lampe Asset Management GmbH in Dusseldorf, Germany. “There’s no rational choice anymore, no rational reaction. The Americans will add to the European selling.”

More than $5 trillion has been erased from the value of global equities since China unexpectedly devalued the yuan on Aug. 11, fueling concern that the slowdown in the world’s second-largest economy is worse than anticipated. The rout is shaking confidence that the global economy will be strong enough to withstand higher U.S. interest rates, even as bets ease on a September increase. ..................(more)

http://www.bloomberg.com/news/articles/2015-08-23/asia-braces-for-more-selling-as-deepening-stock-rout-boosts-yen