Alarm bells rang across world markets on Monday as a 9 percent dive in Chinese shares and a sharp drop in the dollar and major commodities panicked investors.
European stocks .FTEU3 opened more than 3 percent in the red after their Asian counterparts slumped to 3-year lows as a three month-long rout in Chinese equities threatened to get out of hand. [.SS]
“Markets are panicking. Things are starting look like the Asian financial crisis in the late 1990s. Speculators are selling assets that seem the most vulnerable,” said Takako Masai, head of research at Shinsei Bank in Tokyo.
With serious doubts now emerging about the likelihood of a U.S. interest rate rise this year, the dollar .DXY slid against other major currencies. It was last 121.05 yen having gone as low as 120.73 JPY= in Asia, a level last seen on July 9.
Commodity markets took a fresh battering. Brent and U.S. crude oil futures hit 6-1/2-year lows as concerns about a global supply glut added to worries over potentially weaker demand from China.
U.S. crude was down 3 percent at $39.20 a barrel CLc1 while Brent LCOc1 lost 2.4 percent to $44.40 a barrel.
Copper, seen as a barometer of global industrial demand, tumbled 2.5 percent, with three-month copper on the London Metal Exchange CMCU3 hitting a six-year low of $4,920 a tonne. Nickel CMNI3 slid 4.6 percent to its lowest since 2009 at $9,730 a tonne.
(READ MORE: Rand tailspin edges past a 14-year low)