London's FTSE 100 index was down 4% by early afternoon, while major markets in France and Germany fell 4.6% and 4.4%.
Overnight futures trading suggested further losses for the Standard & Poor’s 500-stock index in the United States.
Shares in Asia were hit overnight, with the Shanghai Composite in China closing down 8.5%, its worst close since 2007. Chinese media are calling it "Black Monday."
Analysts warn the market volatility is set to continue in the days ahead, with trillions of dollars already wiped off global share markets since China reduced the value of its currency, the yuan.
The Shanghai composite index was down as much as 9 percent, with Japan’s Topix index marking its largest five-day retreat since the 2011 March earthquake and tsunami. Hong Kong’s Hang Seng index is now down 25 percent from highs in April.
Commodity prices fell, with Brent crude petroleum falling past $45 a barrel. Several currencies weakened against the U.S. dollar.
7 days of losses
Monday marked the seventh straight day of losses on key Asia-Pacific market indices, down almost 5 percent, the most since 2011.
“I guess the question that people are starting to ask – and certainly I’m asking is how, just how this gets stemmed,” said Sydney-based senior foreign exchange strategist for ANZ Bank, Daniel Bean
More than $5 trillion has been erased off the value of global stock prices since China moved to devalue the yuan.
Singapore-based Daniel Martin, senior Asia economist for research firm Capital Markets, says China's economy is more stable than many investors realize.
“The equity market side; if it is a reflection of China’s economy doing a lot worse than we have previously thought, then that’s obviously a big issue for Asian economies. We don’t actually think that’s the case though. We see it more as a stock market correction that will run its course and should settle down within the next few weeks or so,” he said, adding “I don’t think they’re panicking that the economy is suddenly falling off a cliff, which markets seem to be thinking it is.”
Asian market analysts say the U.S. Federal Reserve may wait until next year to raise U.S. interest rates, given the uncertain market climate.
voanews.com
24/8/15
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