Investors are bracing for a Black Tuesday on the ASX this morning after US stocks fell overnight, mounting worries over the Chinese economy.
The ASX experienced the worst day since the GCF yesterday, with investors bracing for a further slump today after the Aussie dollar fell another US2c overnight. US$
5tn has been erased from global equities value since the yuan unexpectedly devalued earlier this month, raising concern that China’s economy slowdown is far worse than originally expected.
The Sydney Morning Herald reported this morning that Chinese share values have reached their lowest since 2007 and commodities have fallen to a 16 year low, and the Dow fell more than 6 per cent overnight and the FTSE plunged more than for per cent.
Last week, investors withdrew US$1.9bn from US exchange-traded funds that buy in emerging-market stocks and bonds.
“There is no doubt that the panic begets panic in this market,” Michael Holland, chairman at Holland & Co, said in a Bloomberg Television interview. “Yet you called Black Friday, we certainly have Black Monday morning starting for us, so it's a psychological thing. It's pervasive. It's everywhere.”