Published on : Aug 24, 2015
Impelled by the weakening manufacturing numbers of China, the global market selloff accelerated on Friday. The incessantly weakening position of Chinese manufacturing has started to worry the investors.
The economic news for North America was not quite pleasant as well. The North American stock market took another deep plunge with the average of Dow Jones industrial falling more than 520 points, and S&P diving below 2,000 points for the first time since February this year. The composite index of S&P showed loss for a fifth straight session, sinking from 13 per cent to 5.6 per cent for the first time since April.
The private survey conducted recently called catalyst Friday showed Chinese manufacturing shrinking below expected levels at the fastest pace in the last six years. The plummeting stocks of Chinese manufacturing followed last week’s news of devaluation of Chinese yuan and the plunge witnessed by the Chinese stock market recently. The latest stock reports has raised concerns that the second-largest economy in the world, who is also a key driver of growth globally is slowing down at an unexpectedly fast pace.
The news about the weakening manufacturing sector of China came along with the news about emerging market currencies, which are either weakening or being devalued, as capital escape their economies. According to the market statistics revealed on Friday, oil prices yet again registered a decline, with the intermediate crude oil from West Texas falling below US$1 at just over US$40.
This also brings a bad news for Canada’s economy, which heavily relies on energy production. Other commodities also registered a steep fall, and the Bloomberg commodity index struck at its lowest ever since 2002. The epicenter of this market turmoil is believed to be the unsettling shift in the psychology of investor.