U.S. stocks ended sharply lower, with investors also unnerved by a more than three-hour suspension in New York Stock Exchange trading. A technical glitch forced the halt, not a cyberattack, the exchange said.
Chinese shares have lost more than 30% in value since mid-June and investors are worried the market turmoil there could destabilize the global economy.
The yen rose to a seven-week high against the dollar as investors sought safe-haven assets. US-dollar denominated Nikkei futures were down 5.5%, on track for their biggest daily drop since Aug. 8, 2011.
“I don’t think the Greece situation is a focus in the markets beyond the short term,” said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York. “This is really about China, where the selloff continues
unabated despite efforts by People’s Bank of China to halt this.”
MSCI’s all-country equities world index lost 1.2%, while the Dow Jones industrial average fell 261.49 points, or 1.47%, to 17,515.42. The S&P 500 lost 34.66 points, or 1.67%, to 2,046.68 and the Nasdaq Composite dropped 87.70 points, or 1.75%, to 4,909.76.
European shares ended up 0.1%, snapping a four-day losing streak after Greece made a formal request for a three-year loan deal from the Eurozone rescue fund.
The bloc’s leaders gave Athens until the end of the week to come up with proposals for reforms in return for loans, in the absence of which Greece is likely to crash out of Europe’s single currency zone.
Beijing’s steps to stabilize its turbulent markets in recent weeks have met with little success. On Wednesday, more than 500 China-listed companies announced trading halts on the Shanghai and Shenzhen Exchange, taking suspensions to over 1,300, or 45% of the market.
The dollar fell to its lowest since May 19 at 120.46 yen. It was last at 120.68 yen, down 1.5%. The euro also dropped against the yen, down 1.1% at 133.38 yen , after earlier sliding to a six-week low.
Commodity markets, among the most exposed to China, were slowly starting to regain their footing. Benchmark copper on the London Metal Exchange climbed as the dollar slipped. It ended up 3.4% at $5,520 a tonne after hitting a six-year low of $5,240.
Gold also rose as the dollar softened, with spot gold up 0.6% at $1,161.60 an ounce.