China stocks rout stings world equities, commodities

Mon Jul 27, 2015 5:09pm EDT
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By Michael Connor

NEW YORK (Reuters) - The biggest rout in Chinese shares in eight years stoked concerns over slowing growth in the world's No. 2 economy on Monday, knocking down global equities and the prices of key commodities.

The dollar eased on safety bidding for other major currencies and the euro topped $1.11 for the first time in two weeks, supported by strong German business sentiment data.

Wall Street ended down on the worries over China's slowing growth, crystallized by a stunning 8.5 percent fall in Shanghai shares that also rattled equity markets in Europe and Asia.

China's top securities regulator quickly said the government would continue to buy shares to stabilize the stock market as an unprecedented rescue plan already in place appeared to be sputtering.

"Dollar weakness against the euro and the yen is a risk-aversion story reflecting China stocks," said currency strategist Richard Franulovich at Westpac in New York.

Wall Street's Dow Jones industrial average finished down 127.94 points, or 0.73 percent, to 17,440.59, the S&P 500 ended down 12.01 points, or 0.58 percent, to 2,067.64 and the Nasdaq Composite lost 48.85 points, or 0.96 percent, to 5,039.78.

Nine of the 10 major S&P 500 sectors were lower.

Shares of Teva Pharmaceutical jumped 16.41 percent to a record high of $72.00 after it agreed to buy Allergan's generic drugs business for $40.5 billion, giving up on its bid to buy Mylan. Allergan rose 6.09 percent while Mylan fell 14.51 percent.   Continued...

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, July 23, 2015. REUTERS/Lucas Jackson