Why global stock markets fell in summer 2015

    Why global stock markets fell in summer 2015

  • 1 Fears of a global slowdown

    Fears that a global slowdown is happening forced many investors to sell their stocks as a result of believing that companies are going to post lower profits.

  • 2 Fears of a slowdown in China

    The numbers released in China have shown that the manufacturing sector has slowed down. Since China is responsible for a great part of global growth, investors are expecting the global economy to slow down.

  • 3 The devaluation of China's currency

    In August 2015, China devalued its currency by 23%. A move that is expected to make China's products more competitive. This move was taken as a sign that China's government is trying to battle a slowdown.

  • 4 The cheaper Chinese Yuan might hurt profits of other countries

    The cheaper Chinese Yuan might reduce the profits of non-Chinese companies, as their products will become much more expensive compared to Chinese products.

  • 5 An expected rate hike in the United States

    The widely expected rate hike in the United States has fueled fears that this rate hike could slow down the US economy and make its currency less competitive.

  • 6 The great drop in oil prices

    Oil is widely believed to be an indicator of economic consumption. The fact that oil prices fell below $39 has sparked fears that the global economy is slowing down fast.

  • 7 Fears of a new financial crisis

    Some analysts predicted that a new financial crisis will happen similar to the one that happened in 2008. As investors became uneasy about those predictions, they started selling their risky assets and stocks. 

  • 8 Money flowing out of emerging markets

    Some people assume that the money that has flowed out of the emerging market throughout 2016 is a sign of lack of investors' confidence and assume that this will lead to even lower numbers.

  • 9 The fall of commodity prices

    Some people assume that the fall in commodity prices reflects a slower demand, and so a weaker global economy rather than an over-supply.

  • 10 Falling markets drag each other down

    As one market falls, neighboring investors from other countries get affected and start selling as well. As some investors lose money in some markets, they also sell in their home markets to prevent further losses.

  • 11 Devaluing the Yuan won't have a fast effect

    Even though some investors believe that devaluing the Yuan can help China maintain its fast rate of growth, this change still needs some time in order for its effect to appear.