Reuters Insider - Market sell off on hold - more to come?

Baader Bank AG

08/01/2016 16:12

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 https://insider.thomsonreuters.com/link.html?cn=share&cid=1548416&shareToken=Mzo5YWRkMDJmYy03OTVhLTQ0MzMtYWNhYi1iM2NjMzVjMjUxOWQ%3D&playerName=ReutersNews 
                                                                       
 Source:             Thomson Reuters                                   
                                                                       
 Description:        China staunches the bloodletting in its stock     
                     markets by ditching its 'circuit breaker'         
                     mechanism and fixing the yuan higher for a change, 
                     giving markets elsewhere some relief.             
 
 
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Transcript (May be auto-generated)

                 It's been anything but a happy new year for global stock markets. But China's 
major indices did regain some ground after the People's Bank of China raised its
yuan fix for the first time in nine days. Beijing also ditched a circuit-breaker
mechanism that's been blamed for making this week's sell-off much worse. That 
news buoyed other Asian stocks, too. To the relief of investors like Parry 
International's boss, Gavin Parry. The fact that they've removed these circuit 
breakers is going to, again, obviously free up the aspect of people to manage 
their risk profile, and hopefully effectively flush things out of the system. 

The pan-European FTSE Eurofirst 300 appeared bound for its steepest weekly drop 
since late August. But as Friday's session opened, also showed signs of inching 
back. Even if worse could come, warned Baader Bank's Stefan Scharffetter. A 
great deal of nervousness certainly remains, as we see that the problems in 
China are far from solved. The market continues to function only through 
regulating interventions by the Chinese authorities and we must not lose sight 
of that. China, though, not the only worry, says CEBR's Vicky Pryce. Recent US 
data has economists downgrading their outlook there too - less than a month 
after a Fed rate hike supposed to signal all is well. The implications of 
raising rates further over the coming year, particularly with the global economy
slowing down, are beginning to worry investors and certainly suggesting perhaps 
that the increase was premature. Brace for further turbulence ahead