Brutal: Amsterdam stock exchange plummets on China
With reporting by Zack Newmark.
The Euronext Amsterdam AEX index briefly suffered its biggest fall in ten years on Monday, plunging to a loss of almost nine percent just after 3:30 p.m., before a rebound helped recover some of the hit. The AEX touched 404 points, it's lowest price since last October, suggesting that the ongoing Chinese stock market crisis has managed to evaporate the whole year's earnings in a matter of weeks.
The AEX was sitting on €418.73, a nearly 5.5 percent fall, as of 5:15 p.m., and the afternoon session closed down 5.25 percent, or 23.19 points, to €419.68. It was the index's lowest close in over seven months.
Handfuls of workers gathered outside Beursplein 5, home of Euronext Amsterdam. The mood outside was quiet with people chatting in hushed tones over cigarettes under the shutdown stock ticker above the entry way. Normally brightly lit with corporate logos and stock prices scrolling by at blazing speed, the sign was not functioning Monday afternoon. A smaller ticker in back of the building mostly showed a steady stream of red prices and symbols indicating a day of heavy losses.
Wall Street also had a drop at the opening, which dragged the European stock markets further down. As of 4 p.m. the US Dollar lost 2.25 percent against the Euro. The Dow Jones lost more than six percent at opening and the Nasdaq technology exchange more than eight percent.
In the wake of the heavy price losses in Asia, the AEX opened with an already steep drop. Shortly after midday, the AEX index fell below 424 points, its price at the first day of trading in 2015. About three weeks ago the AEX was sitting above 500 points.
Lower growth means less demands for commodities, such as iron ore and oil, broadcaster NOS declared. The Brent oil price has fallen to 43 dollars a barrel, while the American crude oil to less than 40 dollars a barrel.
The largest loss at the Amsterdam exchange similarly affected commodity businesses, such as steel company Arcelor Mittal with a nine percent fall, while oil company Shell tumbled more than six percent.
The downturn in the Chinese stock market started two months ago, and reached a peak last week when its stock market lost a fifth of its value, a downward trend that has continued into this week's start. The Shanghai stock exchange closed 8.5 percent lower, the Hong Kong stock exchange dropped five percent and the Tokyo stock exchange lost 4.5 percent.
Stock market drops are causing increased fear among investors in China and around the world. They are worried about the slowdown in economic growth and are concerned that this will spread to Europe, the United States and Japan.