As an investor it’s hard not to panic as stocks continue to plunge. Adam Shell of USA TODAY with five tips on keeping your cool. Michael Monday
TOKYO — European markets bounced back and U.S. stock futures rocketed higher Tuesday as China cut interest rates for the fifth time since November in an effort to boost its slowing economy.
Dow, Nasdaq and S&P 500 stock index futures were all up over 3%. European stocks rose sharply.
France's
The
The central bank also lowered the amount of crash reserves Chinese banks are required to hold.
The announcement was made after the close of Chinese and other Asian markets, which were volatile Tuesday as Chinese stocks plunged again and Tokyo markets also fell sharply after earlier rebounding.
The
The index is now below the psychologically important 3,000 level.
On Monday, China's benchmark plummeted 8.5%, triggering a wave of major stock markets losses worldwide, including the Dow, which fell 3.6%.
China's smaller
In Tokyo, the benchmark
"Relief, bargain-hunting and the realization
that Fed interest rates could be lower for
longer are all likely contributors to this
morning’s better tone," said Jane Foley, an
analyst at
Some analysts nevertheless cautioned that the drop in China share prices reflects a necessary market correction.
"Investors are overreacting about economic
risks in China,"
The volatility followed Monday's continued downdraft on Wall Street as the Dow — which was briefly down more than 1,000 points — finished with its second drop of more than 500 points in as many days. The broader Standard & Poor's 500-stock index tumbled into official correction mode for the first time since 2011.
Elsewhere across Asia,
China is facing a slowdown in economic growth, the banking system is short of cash, and investors are pulling money out of the country.
"More (government) measures are needed to
activate the market, like reducing taxes and
restoring confidence in the real economy,"
said Xiao Lei, a senior market analyst at Shiji
Jinhang, in
The steep loses for Chinese stocks came amid reports that Beijing may be censoring negative media coverage of China's financial markets.
However, for several hours Monday night and Tuesday morning, people in China searching for the term "stock crash" on Chinese search engines were told that "in accordance with the relevant laws, regulations and polices, some search results have not been displayed."
Contributing: Greg
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