New | Sea of red for Chinese ADRs as global market correction deepens

Amid concerns for global growth after the Asian Development Bank’s cut to China’s growth forecast and policy overhang from commentaries by regional heads of the Federal Reserve, US and European equities, fixed income, foreign exchange and commodities all traded down on Tuesday.

US stocks extended Monday’s losses in midday trading with the Dow Jones Industrial Average down 1.46 per cent to 16,269.3 points, the Standard & Poors Index dropped 1.56 per cent to 1,936.35 points, while the Nasdaq fell 1.93 per cent to 4,735.9 points.

European stocks also did not fare well. Led by the slump in carmakers’ shares, Germany’s DAX was down 3.8 per cent to 9,570.66 points at the close while France’s CAC declined 3.42 per cent to 4,428.51 points. In Britain, the FTSE 100 was off  2.83 per cent at  5,935.84 points and the Swiss Market Index was down 3.49 per cent to 8,475.47 points.

In currencies, the euro continued its fall, losing 0.58 per cent to US$1.1122 due to structural weakness. The pound is also down by 0.91 per cent to US$1.5364. Because of the risk-off related to China, the yen gained some strength against the dollar. The dollar-yen index is down by 0.45 per cent to 120 yen.

Against this backdrop, contrary to the modest gains seen in greater China markets yesterday, it was a sea of red for Chinese American Depository Receipts  in midday trading in New York.

The top five losers were: Youku Todou, down 7.63 per cent; SouFun Holdings, off  6.68 per cent; Autohome, 4.03 per cent lower; Baidu, down 3.76 per cent; and Bitauto Holdings with a fall of  3.33 per cent.