A new year for global stock markets has seen the reemergence of an old pattern, with huge declines in the Chinese stock markets echoing all over the world.
After the CSI 300 — a composite of the stock exchanges in Shenzen and Shanghai — fell by more than 300 points by the early afternoon, the Chinese stock markets closed thanks to rules to prevent fast, dramatic changes in stock prices.
But that didn't stop stocks from sliding all over the rest of the world. The Nikkei 225, a Japanese stock index, fell more than 3%, while the Stoxx 600, a European index, closed down 2.7%. And just like in past stock seizures that started in the East, it has lapped up in the United States.
The Dow Jones Industrial Average opened down just over 350 points, about 2%, while the S&P 500 and the NASDAQ composite both opened down around 2% as well. The S&P rose towards the end of the day and finished down just over 1.5%, while the Dow was down 276 points, or 1.58%.
According to data from Bloomberg, today was was the 14th worst day for the CSI 300. The last time the Chinese index fell more than 7%, on August, 25, the S&P 500 closed down 1.4%.
Markets were battered by both weak data on the Chinese manufacturing sector — which Nomura described as "pointing to economic contraction." Oil prices also ticked up following diplomatic tension between Saudi Arabia and Iran.