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.

U.S. Markets Feel the Heat

Major indexes suffered a rout on Friday following concerns about the state of China’s economy. Friday’s heavy selling pushed the Dow into the correction territory. Additionally, the blue-chip index and the S&P 500 posted their biggest weekly declines since Sep 2011. The Nasdaq recorded its steepest weekly drop since Aug 2011.

For the week, the S&P 500, the Dow and the Nasdaq declined 5.7%, 5.8% and 6.7%, respectively. Benchmarks slumped on concerns that a weak Chinese economy would result in a global slowdown. Continuing slump in oil prices also dampened investor sentiment.

European Benchmarks Drop

European stocks declined in excess of 2% on Friday, triggered by the slump in China markets. Important benchmarks in Europe entered correction territory. This occurs when indexes lose 10% or higher than the peak achieved that year. The FTSEurofirst 300 lost 3.4%, experiencing its worst year since Nov 11.

On Monday, the FTSEurofirst 300 had lost 2.8% by the middle of the morning session. The FTSE 100 had fallen to its lowest point since Jun 2013. However, the Euro rose to a six and a half month peak. In contrast the dollar declined, falling to its lowest level versus the yen in three months. 

Our Choices

Markets across the world have slumped following worries over China. Meanwhile, the Fed remains undecided about a rate hike, given worries over the oil price slump and the Chinese situation.

Despite the slump in European markets, data coming out of the region has been positive in nature. Markit’s composite purchasing managers index increased from 53.9 in July to 54.1 in August. This indicates that the Eurozone’s economy is set to post 0.4% growth, increasing from 0.3%.

Given this situation, it may be a good idea to diversify beyond U.S. shores and add stocks from the region to your portfolio. Though the stocks listed below have experienced losses, they continue to be potential investments and are now available at a good bargain. Our selection in also backed by good Zacks Value Score and Zacks Rank.

We narrowed down our choices with the help of our new style score system.

Our research shows that stocks with Value Style Scores of ‘A’ or ‘B’ when combined Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the value investing space.

Ageas SA NV (AGESY - Snapshot Report) is an international insurance company based in Belgium.

Ageas holds a Zacks Rank #2 (Buy) and has a Value Style Score of ‘A.’ The stock has lost 3.7% over the last one week. The forward price-to-earnings ratio (P/E) for the current financial year (F1) is 10.31. The company has expected earnings growth of 40.3% for the current year.

Akzo Nobel N.V. (AKZOY - Snapshot Report) is a Netherlands-based company which produces coatings, specialty chemicals and pains.

Akzo Nobel holds a Zacks Rank #2 (Strong Buy) and has a Value Style Score of ‘B’. The stock has lost 4.8% over the last week. The company has expected earnings growth of 41% for the current year and a P/E (F1) of 15.16x.

Ericsson (ERIC - Analyst Report) is a leading provider of communication networks, telecom services and support solutions, headquartered in Stockholm, Sweden.

Ericsson holds a Zacks Rank #2 (Buy) and has a Value Style Score of ‘A.’ The stock has lost 5.3% over the last week. The company has expected earnings growth of 9.8% for the current year and a P/E (F1) of 15.44x.

Koninklijke Philips N.V (PHG - Analyst Report) is one of the largest electronics companies of the world and is headquartered in Amsterdam, The Netherlands.

Philips holds a Zacks Rank #1 (Strong Buy) and has a Value Style Score of ‘B.’ The stock has lost 5.7% over the last week. The company has significantly high earnings growth for the current year and a P/E (F1) of 17.25x.

Atlas Copco AB (ATLKY - Snapshot Report) is a global provider of industry productivity solutions and is headquartered in Stockholm, Sweden.

Atlas Copco holds a Zacks Rank #2 (Buy) and has a Value Style Score of ‘B.’ The stock has lost 5.9% over the last week. The company has expected earnings growth of 16.4% for the current year and a P/E (F1) of 18.15x.

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