US open: Dow plunges over 1,000 points at opening bell as global selloff intensifies

US stocks plunged early on Monday, on the back of a major selloff that saw Chinese stocks plunge to their lowest level since 2007.

Just before 1500 BST, the Dow Jones Industrial Average, which fell by over 1,000 points at the opening bell, was down 798 points to 15,661.01, while the S&P 500 and the Nasdaq were 62 and 171 points lower respectively.

Chinese stock plunge

China’s ‘Black Monday’ rattled global equity markets, with stocks tumbling the most since 2007 as recent government support measures failed.

The Shanghai Composite closed 8.49% lower, while the Shenzhen Composite was down 7.7% and the start-up focused Chinext was down 8.08%.

The latest move by the People’s Bank of China saw the central bank announce that local government-managed pension funds will be able to invest in the markets for the first time, in an attempt to pour billions of yuan into its equity markets.

“The Chinese government’s intervention into stock markets has proven counter-productive,” said CMC Markets’ analyst Jasper Lawler.

“Forcing institutions to buy and banning them from selling has just added to the panic of retail investors who make up 80% of stock ownership in China.

“China in the past eighteen months has been reminiscent of fables told about America during the 1920s before the Great Depression.”

Elsewhere, the dollar plunged 3.88% against the yen, reaching its lowest level against the Japanese currency since 2007. The greenback also lost 0.56% and 2.54% against the pound and the euro respectively, while gold futures slid 0.19% to $1,157.40.

Oil prices tumble

Oil prices continued to slump in the wake of the rout in Asian markets, with both West Texas Intermediate and Brent plunging over 6% to $38.13 a barrel and $42.87 a barrel respectively.

In company news,growing crisis over China led to widespread losses, with Alibaba plunging 14.2%, while Yahoo, which has a stake in the Chinese e-commerce giant, was also down 11%, while Netflix plummeted 16%.

Apple was down 6.48%, while Facebook and Microsoft lost 7.98% and 3.6% respectively, with Google losing 5.06% and Tesla sliding 6.83%

There are no economic reports on tap on Monday, but Federal Reserve President Dennis Lockhartm a voting member of the FOMC, will speak at a forum on public pension funding in California at 2055 BST.

Lockhart has previously stated it would take a ‘significant deterioration’ in the US economy for him not to vote for a September lift-off.