On Monday,
global stocks saw a huge bout of panic selling on Monday as new laws and
interest rates by central banks threatened the health of the world's banking
system since the financial crisis.
The new
rates had seen European markets slump to very low levels in two years. The
generally gloomy outlook for the world economy and the endurance of the world's
biggest lenders will be tested in the following months of 2016.
TheEuro
Stoxx 600 index had fallen by 6 per cent in Monday's trading and closed at 5.6
per cent. Europe had lost about 17.3 per cent of their value in the previous
month.
The high
instability of stocks had forced Barclays shares to be suspended by the late
afternoon trading. Barclays, BNP Paribas and ING Santander dropped by 5 per
cent upon market closing.
Deutsche
Bank fell to 11.8 per cent and closed at 9.5 per cent on Monday. It had also
seen an estimated 40 per cent of its market capitalisation wiped off during the
start of the year.
Meanwhile,
Japan is struggling with its negative interest rates, joining Denmark, Sweden
and Switzerland.
According
to CMC Markets' Jasper Lawler:
"Investors
have significantly reassessed the chance of an earnings turnaround after years
of regulatory fines for past misdeeds."
Due to a
weak Chinese economy, a strengthening US dollar and low global growth, experts
generally expect 2016 to be turbulent.
