World stock markets plummeted on Monday as the Shanghai composite closed down 8.5%, marking the biggest slide in Chinese stocks since 2007. The brutal sell-off comes despite Beijing’s measures to arrest the decline.

© Toru Hanai

“This is a real disaster and it seems nothing can stop it,” Chen Gang, Shanghai-based chief investment officer at Heqitongyi Asset Management Co., told Bloomberg. “If we don’t cut holdings ourselves, the fund faces risk of forced closure. Many newly-started private funds suffered that recently. I hope we can survive.”

Asian markets followed China with a broad sell-off.

Japan’s Nikkei closed down 4.6%, Hong Kong’s Hang Seng was 5.17% in the red, and Mumbai’s Sensex is down nearly 6 percent.

Ripple effects were felt in European markets on Monday as well. The STOXX Europe 600 Index dropped 5.3%, suffering its worst percentage loss since 2008.

London’s market closed with the FTSE 100 Index slumping 4.6% to 5.9 on Monday – its biggest loss since 2009. Germany’s DAX shed 4.7% percent, finishing below 10,000 for the first time since January, according to Market Watch.

Meanwhile, France’s CAC fell 5.4% to 4.4, suffering its worst session since November 2011.
Commodities are down across the board, with Brent crude trading below $44 per barrel, a six-and-a-half-year low.

On Friday, the US WTI crude benchmark dropped below $40 per barrel in an eighth straight weekly decline, the longest falling streak in almost 30 years.

The Russian ruble has fallen to its lowest level since February against major currencies, dragged down by both weak oil and Chinese stocks. The ruble was trading at over 71 rubles against the US dollar and 81.78 rubles against the euro as of 09:25 GMT.

“It is a bloodbath,” Bernd Berg, a London-based strategist at Societe Generale SA told Bloomberg on Monday. “We see panic selling due to global growth fears and uncertainty about the next Fed move.”

Over the last month, the Chinese government has taken drastic measures to stop the stock market's decline. On Sunday, the Xinhua news agency reported that Beijing would allow its main state pension fund to invest up to 30 percent of its net assets in China-listed shares for the first time.


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