Bears grip European markets, sell-off resumes

FXStreet (Mumbai) – European indices resumed its downward spiral on Wednesday after the recovery seen yesterday, as the latest effort by the Chinese central banks seems to have failed to prop up the stock markets with the Shanghai composite index flipping back in to the red zone at close.

Losses came after US stocks ended Tuesday’s session sharply lower, failing to keep the rally following the People’s Bank of China’s (PBOC) action.

The central bank cut the RRR by 50 basis points, and slashed both the deposit and lending rates by 25 basis points in response to the latest huge market sell-off.

While some stocks in Asia rebounded on Wednesday, the Shanghai Composite index closed the session 1.3% lower, even after it had edged up for most part of trading hours.

Markets also seem to have ignored the latest PBOC announcement that the central bank will inject 140 billion yuan into the financial system through a short-term liquidity adjustment operation.

Germany’s DAX 30 index drops -1.31% to 9995 while the UK benchmark FTSE 100 loses -1.45% to trade at 5993. Among the other indices, the French CAC 40 index is down nearly -1.50% and trades at 4497, and the pan-European Euro Stoxx 50 also slips -1.6% to 3,166.

European indices resumed its downward spiral on Wednesday after the recovery seen yesterday, as the latest effort by the Chinese central banks seems to have failed to prop up the stock markets with the Shanghai composite index flipping back in to the red zone at close.

(Market News Provided by FXstreet)