5 European Stocks To Survive The Global Rout

Losses for global markets intensified on Monday following the highest weekly declines for several important markets. Meanwhile, major U.S. benchmarks suffered their worst weekly losses in four years. The major causes for this selloff are concerns emanating from China and the continual slump in oil prices.

Despite encouraging data on certain fronts, such as the labor market and housing, the Fed remains concerned about the state of the economy. Additionally, international concerns are weighing on investor sentiment. Some foreign stocks continue to ward off the effects of an all-round selloff. Adding such stocks to your portfolio may be a good idea in this situation.

China’s Plunge Continues

The Shanghai Composite Exchange plunged, losing 8.5% on Monday. At this point, China’s benchmark index is now languishing in the red for the year. The Hang Seng China Enterprises Index slumped 5.8%, to the lowest point in nearly 18 months.

On Friday, the benchmark was inching below the crucial 3,500 mark, before recovering during the last few minutes of the day. Dismal economic data showed that the government’s efforts to prop up the economy were having little or no impact as of now.

Preliminary PMI estimates from Markit Economics and Caixin Media fell to 47.1, a 77-month low. The decline in manufacturing activity came in despite Beijing’s move to devalue its currency to boost its export oriented companies.

Oil Slump Deepens

On Wednesday, data released by the Energy Information Administration (EIA) revealed that U.S. crude inventories had increased, defying seasonal trends. Price of WTI crude oil declined to the lowest level experienced since Mar 2009. Additionally, Brent crude declined to its lowest level experienced since Jan 13.

WTI crude recovered on Thursday, though Brent price continued to fall further. On Friday, price of WTI crude oil declined again. WTI crude also registered its eighth straight weekly loss, its longest weekly losing streak since 1986. Oil prices took a beating after oil rig counts increased to 674 as of Aug 21. Dismal manufacturing data from China along with continuous supply glut also dragged oil prices down.

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