The US Dow Jones index crashed more than 1000 points within minutes of opening before stabilising to trade around five per cent lower on Monday. It’s an unprecedented move for the Dow which has never lost more than 800 points in a single day.
Stockmarkets in the UK, Germany, France, Italy and Spain also plummeted after China’s Shanghai Composite Index lost 8.5 per cent on Monday — the largest margin in eight years.
The UK’s FTSE 100 index lost more than $85 billion in the first three hours of trading while markets in Japan, Hong Kong, Korea and Australia all closed more than more than 4 per cent down.
The massive sell off, dubbed the “Great Fall of China” is being stoked by fears China has lost control of the situation and doesn’t have the means to fix it.
“Not only are they not in control of it, they don’t even seem to grasp the problems at times,”.
The losses have also pushed oil prices four per cent lower and caused the CBOE Volatility Index — a key measure of volatility in US share markets — to spike more than 50 for the first time since 2009, Reuters reports.