Trading screens all over the world showed a sea of red Friday as a global selloff caps an otherwise calm week. From China, to Europe, to the U.S. Market watchers have attributed at least some of the carnage to a combination of Greek default fears, irrational exuberance in China, and a meltdown of the ubiquitous Bloomberg terminals favored by traders and Wall Street bankers. Here are some charts that show the extent of the damage:
China’s main stock market – the Shanghai Composite Index surged more than 14% so far this month and more than doubled in the past 12 months. This kind of performance has been worrying authorities for a while and on Friday they acted to rein the soaring market.
The announcement of new rules that put a limit on margin trading, along with allowing short selling — bets that stocks will fall in value —on two main stock exchanges had an immediate impact. The H-Shares index futures quickly sold off, falling more than 5% after the announcement that came in after regular markets closed.