Chinese stock market crash triggers sell-offs in New York and Toronto
North American stock markets got off to a rocky start after a steep drop in Chinese share prices.
The Dow Jones Industrial Average and the Toronto Stock Exchange are both down nearly 500 points after falling even more sharply in the opening minutes of trading.
At one point, the Dow was down by 1,089 points.
The New York Stock Exchange said it would suspend trading if the S&P 500 index fell by seven percent.
Meanwhile, they're calling it Black Monday in Shanghai.
Shares on China's largest stock exchange fell 8.49 percent but it could have been worse. That's because trading was halted in many companies after share prices fell by more than 10 percent.
The Guardian recently reported that Chinese shares trade at price-earnings ratios of 70:1 compared to a global average of 18.5:1.
Today's drop on the Shanghai market was the largest percentage decline since 2007.
It comes after the recent devaluation of the Chinese yuan and reports that the Chinese manufacturing sector is shrinking.
China has the second-largest economy and if it's in trouble, that will likely have ramifications on companies around the world.
Comments
1 Comments
Richard S.
Aug 24, 2015 at 9:10am
This will have ramifications for Canada, and particularly Vancouver, as well. The devaluation of the yuan has already contributed to the devaluation of the Canadian dollar. But this recent steep drop in shares also occurs in step with Xi Jinping's continuing crackdown on China's corrupt elite, many of whom have already chosen Vancouver as their preferred destination for capital flight. Presumably, this will mean even greater inflation of real estate in Vancouver (if such a thing can be imagined).