Stocks Steady as China Bounces Back

By Tommy Stubbington 

        Global stock markets steadied on Tuesday after heavy declines, as Chinese shares bounced back from their lows in another roller coaster session.
        In Europe, the Stoxx Europe 600 was up 0.8% midmorning. The index had fallen 2.2% on Monday as the biggest one-day fall in eight years in the Shanghai Composite Index spilled over into global markets.
        Stock futures indicated a 0.5% opening gain for the S&P 500 after a decline on Monday. Changes in futures aren't necessarily reflected in market moves after the opening bell.
        Shanghai shares fell a further 5% on Tuesday, before rebounding to close 1.7% lower. Japan's Nikkei index closed down 0.1%.
        The rout in China has fanned fears over slowing growth in the world's second-largest economy, stalling a rally in Europe that began after Greece and its creditors agreed to negotiate a new bailout. Investors are also looking ahead to Wednesday's update from the Federal Reserve for clues on the timing of an interest rate rise that some expect as soon as September.
        The combination of a potential escalation of the crisis in Greece with problems in China and an imminent Fed rate rise is a worrying one for investors, said Rabobank analyst Michael Every.
        "We appear to still have all three issues on the horizon," he said.
        Talks to complete a bailout program between Greece and its creditors will start Tuesday, nearly a week later than planned.
        Still, many investors remain relatively sanguine about the turmoil in the Chinese stock market, betting that shares elsewhere are relatively insulated from the volatility there.
        "It is a hard market to get your money into, so people's exposure is limited," said Guy Foster, head of portfolio strategy at wealth manager Brewin Dolphin, which oversees GBP26.2 billion ($40.6 billion) of assets.
        Moves in China stocks are a poor barometer for what's happening in the country's economy, which is of far greater concern to investors, he said.
        In currency markets, the euro fell 0.3% against the dollar to $1.1059 after a sharp rise on Monday.
        In commodities, oil prices were trading near four-month lows after being hit by the Chinese selloff. Brent crude was 1.1% lower at $52.91 a barrel.
        Gold fell 0.2% to $1,094.40 a troy ounce.
        Write to Tommy Stubbington at tommy.stubbington@wsj.com
        (END) Dow Jones Newswires

        July 28, 2015 05:20 ET (09:20 GMT)

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