World markets find calm after Chinese share sales storm

World markets are on course for a calmer day as China’s top share index is in positive territory after a shaky start to Wednesday trading. The Shanghai Composite lost more than 4% of its value in early deals but values later recovered after Chinese brokerages pledged more support to the market. There was speculation the authorities exerted some pressure - with the China Securities Journal reporting that nine brokerages had promised additional funds worth over 30bn yuan (£3.1bn) to buy shares.

But investors have lost confidence… the correction isn’t over yet.

Wu Kan, a Shanghai-based fund manager at JK Life Insurance

The FTSE 100 closed down 3% on Tuesday - wiping around £4.5bn from its value while in New York the Dow Jones lost 2.8%. The FTSE gained 0.5% in early trading on Wednesday while futures markets indicated a similar opening for US stocks. The slowdown in China remains in sharp focus for investors amid fears it is worse than official figures are suggesting. China needs annual GDP growth above 5% to maintain employment levels - with Beijing expecting growth of 7% this year.

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