US stock market closes 3.5 percent lower amid global sell-off

Shock waves have been sent across stock markets due to the Chinese economic meltdown with the US stocks closing sharply lower.

The American stock market closed 3.5 percent lower on Monday with the Dow Jones industrial average dropping nearly seven percent.

The stock market index experienced a loss of 588 points, the biggest point drop ever after shedding more than 1,000 points in early trading.

The global sell-off triggered by worries over the state of the Chinese economy led to concerns in the Wall Street and across the globe.

As a result of the meltdown, Tuesday’s markets also opened significantly lower in eastern countries.

Tokyo shares fell 3.47 percent and the Nikkei-225 index at the Tokyo Stock Exchange dropped 643.80 points to 17,896.88.

“No one enjoys watching markets implode like this, but there’s not much you can do about it, that’s the problem,” James Lee, managing director and head of securities at First NZ Capital Ltd., told Bloomberg News.

Australian stocks also dropped 1.41 percent with the benchmark S&P/ASX200 index standing at 4,930.9, 70.4 points lower.

Other Asian and European states, including developing countries, also suffered from the slump as oil prices and currencies fell.

Analysts have warned of more losses amid a bleak economic outlook.

“I’m not a buyer that this is the crisis of all crises,” said Mohamed El-Erian, former CEO of Pimco. “Yes, this is a very unpleasant repricing, very unpleasant. And it’s going to go quite deep, but it’s not going to derail the economy in a major way.”