China optimism fades, markets tumble

Chinese shares dropped on Wednesday, and commodities saw significant losses as investors tempered their optimism about a Chinese economic recovery.

Meanwhile, global markets stabilised amid hopes that the US economy will continue to grow and support global demand.

The New Zealand dollar declined by 0.6 per cent following a 50-basis point interest rate cut by the central bank, which expressed concerns about the economic outlook and hinted at the possibility of further rate cuts.

MSCI’s Asia-Pacific index outside Japan rose by 0.6 per cent, with Hong Kong shares bouncing back by two per cent after a significant drop the previous day.

Hong Kong markets suffered a sharp decline on Tuesday, affecting mainland shares and commodities like oil and metals. The Shanghai Composite and CSI300 both fell by around three per cent on Wednesday.

Brent crude futures stabilised at $77.79 a barrel after a 4.6 per cent drop, while iron ore prices found support at $106 in Singapore following a five per cent decline on Tuesday.

Attribution: Reuters

Subediting: M. S. Salama