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MTECHTIPS:-Oil plunges to fresh 6-1/2 year low as panic grips the market

MTECHTIPS:-Oil plunges to fresh 6-1/2 year low as panic grips the market

Oil futures sank to levels not seen since the peak of the global financial crisis in 2009 on Monday, as steep declines on China’s stock market rattled investors’ confidence. The Shanghai Composite tumbled nearly 9% on Monday, the biggest one-day drop since February 2007, on investor disappointment that Beijing held back from implementing fresh measures over the weekend to support stocks after markets fell 11% last week. Chinese equities have been under heavy selling pressure in recent weeks amid fears over China’s slowing economy and worries that Beijing may allow the yuan to continue to depreciate. Market players are concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation’s demand for oil will decline. Meanwhile, Germany’s DAX crashed almost 5%, while the Dow and S&P 500 pointed to heavy losses at the open, as fears of a China-led global economic slowdown spooked traders and rattled sentiment. Financial markets have been roiled since China devalued the yuan on August 11, sparking a selloff in equities, commodities and emerging-market assets.

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