World stocks and commodity prices have tumbled again as poor Chinese data see fears about its economic health make an unwelcome comeback. As Sonia Legg reports, oil prices also fell more than 3 percent after official data showed China's giant manufacturing sector contracted at the fastest pace in three years.
It may be a new month but there's no end to the market volatility. European stocks followed Asian ones down - more poor Chinese data the catalyst, along with weekend suggestions the U.S. Federal Reserve may still go ahead with a rate cut sooner rather than later, regardless. Europe's FTSEurofirst opened 2.5 percent lower after its worst month in four years. London, Frankfurt and Paris were all down by a similar amount. Earlier, China's Shanghai Composite Index closed down a modest 1.2 percent. But Japan's Nikkei slumped 3.8 percent Stocks in Australia, Indonesia and Hong Kong were all down more than 2 percent. Michael Hewson is from CMC Markets. (SOUNDBITE) (English): MICHAEL HEWSON, MARKET ANALYST, CMC MARKETS, SAYING: "The nature of the bounce last week does appear to suggest that there is demand for what could be categorised as fairly cheap stocks when you compare it to where stock markets were earlier this year but given what is going on in China and in respect to the direction or flightpath of US rates I think uncertainty is likely to create volatility over the course of the next two the three weeks." Oil prices also fell more than 3 percent after three days of hefty gains. Brent and U.S. crude were down around $2 after soaring more than 8 percent on Monday. Reports of lower U.S. production prompted the rise. But oversupply persists as OPEC's apparent attempt to hurt competitors by refusing to cut output appears to be having an impact. (SOUNDBITE) (English): MICHAEL HEWSON, MARKET ANALYST, CMC MARKETS, SAYING: "What we have seen here is a classic case of jaw-boning. It does appear to have worked but I think the barriers to consensus for OPEC and non-OPEC still remain as high as ever." The only significant riser was gold - an investor favourite during periods of uncertainly. It was up again after a 3.5 percent rise in August.