Markets extend losses China falters again

Manama

Global stock markets plunged further yesterday as more gloomy evidence emerged of China's economic slowdown, leading to heavy sell-offs from Hong Kong to New York.

Markets in the middle east also followed the suit as data showed factory activity in China hitting a three-year low, fuelling concern over the health of the world's number two economy.

Saudi Arabia's main stock index fell 1.1 per cent with all sectors in the red. Bahrain index, however, remained flat at 1,299 points.

Tokyo stocks tumbled almost four per cent as China woes spread, with Europe's main markets following in its wake losing around three per cent in mid-afternoon deals. China's statistics bureau said its Purchasing Managers' Index of manufacturing activity came in at 49.7 last month, its lowest since August 2012. A reading below the 50-point mark indicates contraction.

The data sent Wall Street to a sharply lower open with the Dow Jones Industrial Average down 1.67pc fifteen minutes into trade, the S&P losing 1.55pc and the tech-rich Nasdaq giving up 1.28pc.

Christine Lagarde, head of the International Monetary Fund, also added to the gloom when she warned that global growth this year would be "likely weaker" than previously anticipated, less than two months after the IMF cut its global forecast for 2015 to 3.3pc.

The Shanghai stock market ended down 1.23pcon Tuesday, having tumbled by more than fourpcat one point.

Tokyo slumped 3.84pc, with a stronger yen hitting exporters, while Sydney fell 2.12pc and Hong Kong finished 2.24pc lower.

China is also the second-biggest market

for Saudi’s exports and a hard landing for its economy

would have a big impact on Saudi Arabia.

   Dubai's benchmark dropped 2.1pc in another

broad sell-off which affected all sectors. Abu Dhabi's bourse

 fell 2.6pc.

Qatar's index was down 1.3pc. Ezdan Holding

 and Commercial Bank of Qatar dropped 2.6pc each on profit-taking after surging in the run-up to the

rebalancing of MSCI's emerging markets index, which increased

the two stocks' weightings at the end of Monday.

Egyptian stocks were down 0.7pcafter a 2.8pc jump the previous day triggered by the discovery of a

potentially huge gas field off the country's Mediterranean

coast.

Ezz Steel, which analysts say could be one of the

biggest beneficiaries if new gas supplies boost domestic power

generation, continued to rise, adding 3.7pc on top of

Monday's 10pc gain.

Kuwait slipped 0.4pc to 5,798 points, Oman lost 1.1pc to 5,805 points.