A visitor walks inside the main atrium of the London Stock Exchange Group headquarters. London’s benchmark FTSE 100 index fell 1.68% yesterday to close at 5,979.20 points.

AFP/London


Global equity markets went on another rollercoaster ride yesterday as China’s interest rate cut showed little sign of calming jitters over the country’s faltering economy.
Europe’s main stock markets fell, with London’s benchmark FTSE 100 index shedding 1.68% to close at 5,979.20 points.
In the eurozone, the CAC 40 in Paris dropped 1.4% to end at 4,501.05, points, and Frankfurt’s DAX 30 fell 1.29% to 9,997.43 points.
But US stocks surged higher as investors tried to snap a six-day losing streak prompted by the turmoil in the Chinese stock market.
In mid-morning trade, the Dow Jones Industrial Average stood at 15,854.51, up 1.2% on new US data showing that orders for durable goods rose a solid 2% in July.
The broad-based S&P 500 rose 2.07% to 1,906.26, while the tech-rich Nasdaq Composite Index gained 2.15% at 4,603.53.
In London foreign exchange deals, the euro weakened against the dollar at 1.1387 compared with $1.1518 late on Tuesday.
Frazzled investors sent Europe’s top indices swinging between losses and gains after a choppy session on Asian bourses, and analysts predicted even more turbulence ahead.
China’s slowdown has cast a dark shadow over markets because the Asian powerhouse represents around 15% of global economic activity — and it is a top consumer of many commodities.
Analysts at the Capital Economics think tank said the worst may be over.
“Looking ahead, we... suspect that investors will be less worried about China in due course, as it becomes apparent that her economy is not collapsing,” they wrote in a note to investors.
China’s benchmark stock index fell 1.27% to 2,927.29 points yesterday, after veering wildly between losses and gains of around 4% during the day.
“The equity market rollercoaster continues,” said TrustNet analyst Tony Cross as Frankfurt, Paris and London were down between 0.25% and 1% in mid-afternoon trades after Tuesday’s strong gains.
“We’re still seeing some big market swings today... (but) the rate cut from (China’s) central bank was clearly not enough to put investors’ concerns at ease,” said Craig Elam, senior market analyst with trading firm Oanda.
Some analysts see Beijing’s handling of the market slump as a further test of the government’s ability to guide the economy to a more market-oriented model after the shock devaluation of the yuan two weeks ago.
“If problems on China’s financial markets and real economy deepen, and the authorities fail to contain the situation, a full-blown financial and economic crash in China could ensue,” said Christophe Donay, chief strategist at Pictet Wealth Management.
“This is currently the biggest risk for the global economy and financial markets.”