World stocks fall for the fifth straight day, anchored near their lowest level in over two years with investors rattled by the continued slump in oil prices and a surge in offshore Chinese yuan deposit rates. Joel Flynn reports
Asian markets might have been a picture of calm as they closed. But to those on the trading floor it's starting to feel ever more like a rollercoaster. Wild swings in markets here continued, as volatility remains the theme of 2016. Asia-Pacific shares outside Japan just shy of their lowest level in four years - down more than 9 percent this year alone. No prizes for guessing what's drivinig trade, says GKFX's James Hughes. SOUNDBITE: GKFX Market Analyst, James Hughes, saying (English): "At the moment it's very, very exaggerated and it's almost like a panic situation any time we see bad numbers out of China and I can see that continuing at least for the rest of the first quarter." China's latest move was from the central bank - it increased deposit rates in Hong Kong. That was supposed ease heavy downward pressure on the yuan, showing the lengths needed to try and cool volatility. Oil too the other big drag on markets, sliding closer to below $30 a barrel for the first time in 12 years. Asian investors, worrying about deflation, sold Asian stocks and piled into Japan's safehaven Yen. Western markets too were rattled by the slump. SOUNDBITE: GKFX Market Analyst, James Hughes, saying (English): "I think no one envisaged this type of fall and for it to go this deep. I think there have been, we all expected OPEC to move 50 dollars back and it obviously hasn't happened. I think how low it can go? I think we can look to 20 dollars at the moment." European shares shrugged off early weakness though, thanks to - of all things - a rally in the British retail sector. Sainsbury's and Morrisons both posting better than expected Christmas numbers, lifting the FTSEurofirst 300 up from three-month lows.