China fears halt market recovery

Shanghai's stock market slumped more than six per cent and European stocks declined as oil prices dipped today, reversing a brief global rally on hopes of fresh central bank stimulus.
In late morning deals, Europe's main equity markets were falling by around half a per cent.
Russia's stock exchange though tumbled by 3.5 per cent and the ruble slipped as oil's fresh drop continued to hit one of the world's biggest energy producers.
"A slump in Chinese stocks... And further weakness in crude oil has heightened concerns about global economic growth," said Manoj Ladwa, analyst at broker TJM.
After dropping under USD 30, crude futures were back above the psychological threshold and down only slightly on the day.

British no-frills airline Easyjet today forecast a jump in annual profits as low oil prices slash the cost of jet fuel, which is refined from crude.

In Asia meanwhile, a six-per cent-plus collapse for Shanghai's main stocks index led Asian markets lower.
There had been a glimmer of hope that the worst start to a trading year on record may be easing, with a surge across all assets spurred by hints from the European Central Bank Thursday of further monetary policy easing.
A report suggesting the Bank of Japan (BoJ) was considering similar moves fanned the optimism, with crude surging at the end of the week and equities seeing blistering gains.

But analysts said the euphoria subsided as the realisation set in that the oil market is far too oversupplied for its weak demand, and with China's economy continuing to struggle.
Shanghai's slump came despite the People's Bank of China pumping USD 67 billion into the money market to ease tight liquidity ahead of the Lunar New Year holiday.
Analysts said dealers took their cue from losses yesterday in New York, which saw Wall Street's three main indices all shedding more than one per cent in value.
"Some investors have no desire to continue fighting before the upcoming (Lunar) holiday, so the market is quite vulnerable to external factors," Zheshang Securities analyst Zhang Yanbing told AFP.

Also taking a painful hit was Tokyo's Nikkei, which lost 2.4 per cent, while Hong Kong slumped 2.5 per cent.
Dealers are awaiting rhetoric due out of the US Federal Reserve when it ends its policy meeting tomorrow, ahead of the BoJ gathering Friday.