Investing.com - Here are the top five things you need to know in financial markets on Thursday, January 7:
1. China halted again after 7% plunge
Trading on China’s stock markets was suspended for the second time this week after just 30 minutes on Thursday, as a plunge of more than 7% after the open triggered circuit breakers.
Market sentiment was hit after the People's Bank of China set its official yuan midpoint rate lower compared with Wednesday's fix. It was the largest daily drop in the midpoint rate since last August, when an unexpected almost 2% devaluation of the currency sparked a broad based selloff in markets.
Some market players see the tactic as an attempt by China to shore up growth, while others are concerned over a currency war that could destabilize the global economy.
2. China market meltdown spreads across the globe
Global stock markets tumbled on Thursday, as a meltdown on China’s stock market and a rapid depreciation of the yuan rattled investor sentiment
Asian shares fell, with markets in Japan, Australia and Hong Kong all closing deep in the red.
The gloomy mood spilled over to European equity markets, where Germany's DAX crashed 3.5%, as another trading halt in China and sliding oil prices fueled heavy selling.
Elsewhere, Wall Street pointed to sharp losses at the open, with the Dow futures down 400 points, or 2.5%. On Wednesday, U.S. stocks closed at their lowest level since early October, weighed down by fresh concerns over China and slower global growth and as energy shares tumbled with oil prices.
3. Oil extends rout to more than 10-year lows
Oil prices extended this week’s rout to hit levels not seen in more than a decade on Thursday, as mounting concerns over China’s economic outlook added to the view that a global supply glut may stick around for longer than anticipated.
U.S. crude fell to $32.10 a barrel, a level not seen since December 2003, before rebounding to trade at $33.13, down 84 cents or 2.46%, while Brent was last down 67 cents, or 1.94%, at $33.56, after hitting a session low of $32.17, the lowest since April 2004.
4. Gold jumps to 9-week high
Gold prices rallied to a nine-week high on Thursday, as investors sought safety in the precious metal amid a China-led global stock market meltdown.
Gold tacked on $6.00, or 0.55%, to trade at $1,097.90 a troy ounce. It earlier rose to $1,102.50, the most since November 6.
The yellow metal is up almost 4% so far this week on safe-haven demand amid a global stock market rout, worries over the Chinese economy and heightened geopolitical tensions.
5. U.S. data ahead
Investors kept an eye on upcoming U.S. data to gauge if the world's largest economy is strong enough to withstand further rate hikes in 2016.
The U.S. is to produce weekly data on initial jobless claims at 8:30AM ET. Also looming large is Friday's nonfarm payrolls report for December.
The minutes of the Federal Reserve’s December interest rate-raising meeting showed that some officials expressed concerns that inflation could remain at stubbornly low levels. Some members also said their decision to hike was a "close call, particularly given the uncertainty about inflation dynamics”.
The minutes assured markets that further U.S. rate hikes would be gradual.