China's 'Black Monday' sends markets reeling across the globe - as it happened

China has been a major contributor to economic growth and low global inflation for more than two decades.

But tonight, investors around the globe are catching their breath after one of the worst day’s trading in many years. They’re now pondering whether today marks the start of a new and alarming phase of the crisis which began some eight years ago.

Mohamed El-Erian, former CEO of Pimco, believes today’s rout has sunk any prospect of US interest rates being raised next month. But he doesn’t believe we’re heading into a major crisis.

El-Erian told Bloomberg TV tonight:

“I’m not a buyer that this is the crisis of all crises.

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.”

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And while today’s losses are sizeable, they’re not among the worst losses in market history. For all the talk of Black Monday in China, and gloomy photos to match, this was more of a correction in Western markets. One to remember for years to come, though.

In a few hours, Asian markets will reopen; investors could drive a recovery, or send markets deeper into the red. We’ll have a new liveblog up and running to cover the action.

In the meantime, here’s a short summary:

• The US stock market has suffered its biggest sell-off in four years. The Dow Jones ended the day down 588 points, having shed more than 1,000 points in early trading.
  
• The S&P 500 and Nasdaq are both in correction territory tonight, down 10% on their recent peaks.
  
• In London, almost £74bn was wiped off the value of the FTSE 100 index, in a rout led by mining giants.
  
• European stock markets suffered their worst days trading since 2011.
  
• The selloff began in Asia 19 hours ago, where Australia’s market suffered its biggest fall since 2009 and Japan’s Nikkei slumped over 4%.
  
• But China was the worst hit, with the Shanghai composite index dropping 8,5% in the biggest selloff since 2007.
  
• These photos show how the mayhem unfolded

Thanks for reading, and for all the comments. Goodnight! GW

Today’s drama dominates the front pages of Tuesday’s UK newspapers:

Our economics editor, Larry Elliott, argues that today’s crash isn’t just about China; it’s about fears that central banks are preparing to reduce their stimulus measures:

Financial markets in the west have been booming for the past six years at a time when the real economy has been struggling

Recovery from the last recession has been patchy and weak by historical standards, but that has not prevented a bull market in equities.

The reason for this is simple: the markets have been pumped full of stimulants in the form of quantitative easing, the money creation programmes adopted by central banks as a response to the last crisis....

More here:

Today’s selloff isn’t just about share prices.

Commodity prices have also been hit by worries over China; oil tumbled 6%, platinum is down 3.5%, and palladium suffered a 6.5% slide.

There are many reasons why world stocks slumped today, but the underlying fear is that central bankers lack the ammunition to prevent a major crash.

Here’s the Guardian’s take:

Potential disruption to the iron ore trade; the sudden exposure of the South African rand; the incompatibility of Xi Jinping’s anti-corruption drive with that Wild East entrepreneurial spirit which has powered decades of Chinese growth. Watching panic spread from Shanghai and Shenzhen to London and New York, western analysts grabbed for straws of understanding in unfamiliar fields, reflecting not only a professional need to look as if they know what’s going on, but a psychological yearning to impose order on a wild, mercurial swing in the mood. There may be no single reason why August 2015 proved the moment for the world’s investors to take collective fright about the People’s Republic. What there is however, lurking under all the anxiety, is a single question for governments everywhere. Namely, what’s left in the locker?.....

More here: Chinese flu, and the west’s empty medicine cabinet

The VIX ‘fear index’ has closed for the night too, at its highest level since October 2011.

This graph of the Dow Jones industrial average since 2010 underlines the scale of the selloff tonight:

I believe the 588 point drop is the eighth-biggest one-day points decline in the Dow’s history (the 3.57% percentage decline is less dramatic, though)

It’s all over on Wall Street after a day in which stocks plunged, rallied, hovered, and then took a late dive deeper into the red.

The Dow Jones has ended the day down 588 points, or 3.5%, at 15,871. The 16,000 point mark proved a hurdle too far.

The S&P 500 lost around 3.9%, and the tech-heavy Nasdaq shed 3.8%.

That’s the biggest one-day percentage falls for all three indices since 2011, Reuters reports.

It also means the S&P 500 and Nasdaq are both in correction territory, down more than 10% on their recent highs.

Bloomberg’s Alix Steel is calling it “one of the craziest trading sessions” she’s seen in years. And we’re not arguing.

Brian Bolan, equity strategist for Zacks Investment Research, agrees too:

The Dow’s back below 16,000 points,a drop of around 540 points, as the final few trades flash across the markets. Can it claw its way back?.....

You could have made a lot of money by trading the Dow today. And you could also have lost a lot.