Equilibrium's Finance and Investment News Roundup

In the roundup this week, we focus on events in China, where stocks continue to decline, and look at the impact this is having on European markets. We also bring you George Osborne's latest comments on the Lloyds Bank sell-off.

 

China stocks continue to plummet...

Tuesday saw China stocks continue to sink, falling to their lowest level since December with a drop of more than 7%. This came a day after 'Black Monday', when stocks in China plummeted by nearly 9% and triggered chaos across global markets, with fears spreading that slowing growth in China - which has seen its economy enjoy a boom over the last 30 years - will have a knock-on effect for everyone else.

The Shanghai Composite Index SSEC has crashed through the key support level of 3,000 points, and this has resulted in increased panic selling throughout China. The latest movement was prompted by a huge fall in shares on Friday that resulted from particularly weak manufacturing figures.

The index lost 7.6% to sit at 2,964.97 points, while the blue-chip CSI300 index dipped by 7.1% to hit 3,042.93.

There had been suggestions that the events of Black Monday would result in Beijing taking emergency action on Monday night, but no new measures were introduced. The falls in China mean the country is on course for its worst monthly performance in six years, with its benchmark indexes having fallen by around 20% in August. 

...but European shares rebound

Despite events in China, shares in London and in other key markets across London rebounded on Tuesday morning. The FTSE 100 climbed by 1.6% to reach 5,994.11, while there were also rises of around 1.4% for both the Paris Cac and Germany's Dax. In comparison, Tokyo's Nikkei index fell 4% lower.

The impact of events in China on the rest of the world is deemed to be moderate, especially as foreign investment in the country's market is not so substantial for it to ring too many alarm bells. However, given the size of China's economy, there are fears that too sharp a slowdown will inevitably have wider-reaching consequences. 

Lloyds share sell-off 'completed soon'

The selling off of the government's shares in Lloyds Banking Group will be completed sooner rather than later, it has been suggested. Chancellor of the Exchequer George Osborne said he hopes the sale will be finalised within the year, Reuters reports.

Mr Osborne explained the government is of the view that it should come out of the banking system in the UK. His comments come after the government reduced its stake further in the banking group on Monday, with its holding now standing at 13%.

This marks a significant reduction in its stake on the 43% it held during the financial crisis in 2008 and 2009.