Global shares tumble for a sixth day while oil prices slide to levels not seen since the early 2000s, after China allows the yuan to fall sharply again and Shanghai shares drop by 7 percent in less than half an hour. Sonia Legg reports.
They hoped it would be a one off - but two days later traders in Shanghai had nothing to trade. Equities markets were suspended for a second time after Shanghai shares tumbled 7 per cent and triggered global market turmoil. A rule Chinese authorities introduced to prevent big share sell-offs seemingly back-fired. Francis Lun is from GEO Securities. (SOUNDBITE) (English) CEO OF GEO SECURITIES LIMITED, FRANCIS LUN, SAYING: "This circuit breaker rule not only did not reduce market fluctuation, it actually exacerbated the market fluctuation, because when the market falls, everybody will fall over each other trying to sell." China responded by trying to guide the yuan lower. That ignited fears others Asian currencies would try and devalue too. Oil - already suffering from over production and disputes in the Middle East - couldn't stand the pressure. Brent crude prices slid below $33 a barrel - close to a 12-year low. IG's Alastair McCaig. (SOUNDBITE) (English) ALASTAIR McCAIG, MARKET ANALYST, IG INDEX: "It does just go to show how juvenile some of the retail investment community of the Chinese equity markets are and partially how they are still trying to get to grips with this new tool available to the People's Bank of China." European shares again followed Asia's lower, despite encouraging data from the euro zone. Fears of an even slower China could hardly come at a worst time for the region. Baader's Bank's Robert Halver (SOUNDBITE) (English) HEAD OF CAPITAL MARKET ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "China is important for the world economy definitely and once right now we see that China is losing momentum. That's especially negative for Germany, exports, imports to China." Investors sought safety in top-rated German bonds. And in currency markets Japan's yen rose to its strongest in four and half years. All this at the start of a new year many hoped would see recovery not more risk.