Overnight markets throughout Asia were tumbling this morning amid concerns over China's slowdown, prompting comparisons with the region's financial crisis in the early 1990s. Shares in the Shanghai Composite are trading almost nine per cent lower, wiping out all 2015 gains so far and marking the largest drop since 2007. The sell-off continued throughout the morning, despite China’s recent attempts to reassure markets.
During the weekend the Chinese authorities announced measures to help boost the stock market, including allowing state pension funds to invest in shares. Local governments will now be able to invest up to 30 per cent of their pension funds into shares listed on Chinese stock markets. Other Asian stocks fell in morning trading, with Taiwan’s Taiex down 7.2 per cent, the biggest drop since 1990. Hong Kong’s Hang Seng index dropped four per cent, while Japan’s Nikkei fell 3.3 per cent.
In Greece a breakaway party of 25 MPs will take the opportunity to form a new Greek government today, but its leader acknowledges it will fail. The Popular Unity party broke away from left-wing Syriza after its leader Alexis Tsipras resigned as Prime Minister. Experts say the party will use the opportunity for publicity in the run up to the country’s snap elections. The new party is led by former energy minister Panagiotis Lafazanis, who wants to ditch the euro and return to the drachma.
Britain’s biggest business lobby organisation has upgraded its economic growth forecasts in a that the UK will sustain a strong recovery The CBI said domestic demand would be the mainstay of the recovery. it predicted growth of 2.6 per cent this year and 2.8 per cent next year, up from its forecasts in June of 2.4
The housing market also shows no sign of easing up this summer with prices climbing and mortgage lending seeing its strongest month for seven years. City level house prices are seeing their fastest growth for over a decade, property market analysts Hometrack said today. It said asking prices had increased 4.3 per cent in the three months to July.
There are no key announcements today.