China stocks plunge again but Europe rallies on rate cut

Chinese stocks collapsed again today after fears of economic slowdown sparked a "Black Monday" rout across world markets, but European shares rebounded on bargain-hunting.
A slump in Shanghai had sparked pandemonium on the first trading day of the week, wiping about USD 2.7 trillion off global equities as bourses from London to Buenos Aires were snared in a precipitous plunge.
The dollar remained weak and oil prices were languishing after dropping below USD 40 a barrel for the first time in six years.
But European equities -- which suffered their worst slump yesterday since the 2008 financial crisis -- surged on bargain-hunting as China's central bank unveiled new stimulus measures.

"Monday's sell-off may have been overdone but the underlying fears remain. The Chinese economy is slowing and the more we see its markets collapse, the more concerned investors are going to become," said Craig Erlam at trading firm Oanda.
"We have seen before that these large crashes can either spark or act as a warning of a global recession and given how fragile many economies still are, it would be naive to think the same couldn't happen again."

Slowing growth in China -- the world's second largest economy after the United States -- has long kept investors on edge but China's shock devaluation of the yuan two weeks ago, following a string of weak economic data, spooked the markets.

China is the world's top trading nation and a key driver of global growth, so signs its economy is faltering -- particularly when the US Federal Reserve is expected to raise interest rates for the first time in almost a decade -- have fuelled world recession fears.
Tokyo ended a see-saw session down nearly 4.0 per cent, in its sixth straight day of losses, but Hong Kong, Sydney and Seoul eked out gains.
In Europe, Frankfurt and Paris surged by more than 4.5 percent, while London gained 3.50 percent, recovering Monday's hefty falls.
"Turnaround Tuesday continued... With nervy investors pouring back into the European indices as they try and regain the ground that was lost on that nightmarish Monday," said Spreadex analyst Connor Campbell.

Bernard Aw of IG Markets said there was "no clear catalyst" for the global stock meltdown.
"A spate of better economic news may help to allay concerns that global growth is not deteriorating. Certainly, improvements in the Chinese economy will be welcomed.