Why global markets staged a big selloff, in 7 charts

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.

Market Watch

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam