Editorial: The new year starts with a lurch – by John Cumming (Northern Miner – January 5, 2016)

http://www.northernminer.com/

Those returning to work on Jan. 4 with a bit of optimism for the mining industry after a brutal 2015 were hit with a sick feeling in the stomach as global markets dove on the first day of trading in the new year, in defiance of the usual salutary “January effect” on stocks, when investors typically buy back stocks they sold in December for tax-loss purposes.

This latest global market weakness has been fuelled by more disappointing economic news out of commodities-hungry China, coupled with a new wrinkle in global geopolitics: a ratcheting up of tensions between Middle East heavyweights Saudi Arabia and Iran.

In China, fresh manufacturing data shows that activity contracted for the tenth straight month in December, and dipped below levels that show expansion. Chinese stocks markets crashed on the year’s first trading day as a result, with Chinese authorities halting trading and implementing other restrictive measures to temporarily stem the decline.

Chinese markets have wiped out most of 2015’s gains, and market watchers predict more declines ahead, as China’s economy slows and the yuan is devalued — all with markets still well above levels seen before the start of the Chinese stock market bubble in mid-2014.

The long-standing rivalry between Saudi Arabia and Iran turned red-hot as the new year began, with the Saudi regime executing Shia Muslim cleric Sheikh Nimr al-Nimr and 46 others, which the Iranian government has called “a crime.”

For the rest of this editorial, click here: http://www.northernminer.com/news/editorial-the-new-year-starts-with-a-lurch/1003744781/

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