The shock wave set off by a plunge in Chinese stocks reflected intense foreign interest in the nation’s economic health, but it was jitters over Iran and a possible slowdown in the U.S. economy that turned the drop into a global rout, analysts said Wednesday.
They expressed surprise that the 8.8 percent drop Tuesday in China’s markets, which Beijing keeps closed to most foreign investors, could drag down stock prices in New York, Tokyo and elsewhere.
“Markets were on edge, China is the biggest emerging market, something bad happened in China, and that was it,” said economist Stephen Green at Standard Chartered Bank in Shanghai.
“But if you look at fundamentally what changed (in China), nothing new happened,” he said. [Full Text]