China's stock market index falls to eight-month low

China's stock market index falls to eight-month low

China’s stock market index has tumbled for a fourth day, falling 7.6% to an eight-month low as Japanese stocks also fell.

But other Asian rebounded after a day of heavy global losses, and European markets also bounced back in early trading.

The mixed picture comes a day after a global sell-off and tumultuous day on Wall Street, where the Dow Jones closed down 3.6% on Monday.

Markets in Hong Kong, South Korea, Australia and Singapore posted modest recoveries on Tuesday after being hit hard a day earlier.

Analysts said it was unclear whether this was a sign the worst was over or a reprieve in a longer-term bear market.

The Shanghai Composite Index lost 7.6% to 2,964.97 points, adding to Monday’s 8.5% loss and taking the benchmark to its lowest level since December 15.

Tokyo’s Nikkei 225 average was in positive territory for parts of the day, but ended up closing down 4% at 17,806.70. It had fallen 4.6% on Monday.

In early trading in Europe, France’s CAC-40 advanced 1.5% to 4,449.93, rebounding from the previous session’s 5.4% loss. Germany’s DAX gained 1.4% to 9,787.97 after dropping 4.7% on Monday.

Monday’s global sell-off was triggered by the sharp drop in Chinese stocks, but experts said there was little change in economic fundamentals to justify such a massive global slide.

“There was no clear catalyst for the global stock meltdown. The lack of clarity makes it difficult to assess what is needed to stem the rout,” said Bernard Aw of IG Markets in a report.

“A coordinated policy response is critical, and much of this needs to come from Asian economies,” Mr Aw said.

“A spate of better economic news may help to allay concerns that global growth is not deteriorating. Certainly, improvements in the Chinese economy will be welcomed.”

In Sydney, the S&P ASX 200 gained 2.7% to 5,137.30 and Seoul’s Kospi advanced 0.9%, rebounding from Monday’s 3% fall.

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