And more still from China.

The Shanghai Composite, which fell by as much as 6% on Thursday, was flat but in a sign of possible state intervention, the state-run Securities Times sought to soothe jittery investors by calling for more market-friendly policies from the government in Beijing.

Courtesy of Reuters...

Authorities “should roll out positive measures so that investors know the government cares about the stock market, while listed companies and financial institutions should also contribute to improving market confidence,” the media said

State-owned Global Times said in an editorial that China’s stock market “has a limited impact on the whole Chinese economy, and the Chinese economy has withstood this round of impacts.” “What will happen to the US stock market and how it affects the US economy remain to be seen,” the Global Times editorial said.

More on China. The country’s customs agency says foreign trade grow may slow in the fourth quarter compared to Q4 last year.

But reuters reports that spokesman Li Kuiwen says exporters are diversifying their markets, which will support overall export growth.

And in case you’re wondering what all this is about, you’re in good company ... the US economist Paul Krugman doesn’t have a clue either.

Some reaction to the Australian housing market numbers, which are quite bad. Less lending = lower house prices as one tweeter neatly up sums. But at least the number of first-time buyers is the highest for six years.

The bank hearings have wound up in Canberra.

In final questions, ANZ chief Shayne Elliott said fewer customers used physical banks to do their business and so ANZ plans on closing about 12 of its 650 or so branches. That follows a trend, Elliott says, which had been set over the last couple of years, with 30 to 50 branches being closed a year.

Elliott now heads to his meetings with bank customers who have come to Canberra to discuss their issues with him.

Next Friday, Andrew Thorburn, the head of NAB, will face the committee.

The positive moves in the Chinese markets come despite the Singapore central bank announcing a tightening of monetary policy. It’s a sign of the times.

Singapore, which manages policy through exchange rate settings rather than interest rates, noted that it expected steady growth despite the possibility of trade tensions disrupting the global outlook.

Monetary Authority of Singapore said:

In 2019, trade frictions between some major economies and the uncertainty they pose could weigh more discernibly on global economic activity. Barring a significant setback in global growth, the Singapore economy should expand at a pace close to potential in 2019.

The Reserve Bank of Australia has issued its financial stability review today. It says the rise in US interest rates blamed for the current market volatility are not causing much disruption.

But it says that some risks are emerging as the Fed moves away from the low-interest environment:

The extended period of low-interest rates has seen some financial stability risks emerge. Notably compensation for risk is very low with asset prices in a range of markets at high levels, underpinned by low long-term interest rates. Household, corporate and sovereign debt has also risen to high levels in some jurisdictions. For emerging market economies – especially those with structural or cyclical vulnerabilities – there are concerns about the implications of a tightening in financial conditions in the advanced economies.

Those housing finance figures are not great news for Australia’s banks, which have built their huge profitability in recent years on some heroic mortgage lending.

The financial sector of the ASX 200 is down 0.77% today in a market off 0.25% overall.

On the currency markets, the yen has continued to hold up against the dollar at 112 to the greenback. A stronger yen is usually not so good for the Nikkei, which is a stronghold of Japan’s big exporters.

The Aussie dollar – a key proxy for emrging markets in the Asia Pacific region – has also fought back during the big stock selloff, going from around US70.5 to US71.27 this morning.

Elliott also admits that ANZ’s profits have been hit by the aftermath of the commission, explaining that the bank’s return on equity has fallen from 17-18% to 11% in the past few years.

“ANZ’s profitability is dramatically lower than it was,” he says.

Labor MP Matt Keogh has scored a direct hit against ANZ boss Shayne Elliott bringing applause from the audience in Canberra, which includes people from the Bank Reform Now group.

It came after the bank boss seemed to suggest that money being paid out as compensation to customers belonged to investors (“it’s their money” he said).

But Keogh said: “It’s not – it should have been in the customer’s pocket the whole time,” to which Elliott puts his hands up: “I accept that I misspoke there, fair point.

The bulk of the money is not refunds actually, the bulk of the money is actually the cost of going back and finding and recalculating the money and doing the data search - that was the piece I was talking about, the cost of remediation, the work, costs significant amounts of money, that is what I was referring to – but you are quite right, the refund money obviously belongs to customers.”

In commodities, gold has benefited from falling stocks as investors seek familiar safe havens for their money.

Business Insider tells us that on Thursday gold had its best day since Brexit.

Talking of Brexit, just a quick diversion here which readers might find depressing or amusing, or perhaps a bit of both.

The UK transport department has announced that part of the M26 motorway in Kent will be closed while work is carried out on figuring out how to turn it into a truck park in the event of Brexit causing huge delays at the Channel ports and tunnel.

You couldn’t make it up, as they say.

More from Amy in Canberra.

Shayne Elliott says he has met some ANZ customers who felt abused by the bank, and was personally answering emails from customers. He also gives his personal email to the committee and asks people to contact him directly with their concerns. It’s Shayne.Elliott@anz.com

The committee members, including Liberal MP Trevor Evans, are giving personal cases to Elliott and asking about those customers who still say they are not receiving responses from the bank.

“Every case is unique and they should expect a response,” Elliott said, who is appearing before the committee for the fourth time. “I give my commitment that I will be personally involved in the response from the bank.”

He says he won’t always be the person who speaks directly with the customer, but he makes the commitment that he “will stay on top” of responding to customer’s concerns. But he also says, in terms of time frames, some of the matters are exceptionally complicated, mentioning one case which goes back to 1992. But he’s meeting with more customers this afternoon - including the case Evans just raised.

Not a bad start for the ASX after yesterday’s big moves. Losses are easing back already but it’s early days. Volatility could be the name of the game today.

Jonathen Chan, market analyst, CMC Markets, thinks so, and flags today’s data (see below) as key set points:.

Futures markets are pointing to a mixed start for Asia Pacific equities. Regional markets may fluctuate in a similar fashion to the overnight action in the US markets. In particular, the Australia housing finance data due this morning may influence the banking sectors, as well the appearance of senior executives at the royal commission inquiry. The Shanghai stock markets may have a chance to rebound if the trade balance data due this afternoon illustrates growth, or potentially lesser impact from the trade war.

I should say that the Australian stock market opens in Sydney at 10am local time (00.00BST) followed by Tokyo and Seoul an hour later. Then at 02.30GMT trading starts in Hong Kong and Shanghai.

And in Australia this morning it is the turn of ANZ bank boss Shayne Elliott to face questioning by MPs in the wake of the damaging revelations of the banking royal commission. The inquiry has exposed a widespread culture of greed in an industry once revered for having avoided the worst ravages of the global financial crisis. Matt Comyn, the boss of the country’s biggest bank Commonwealth, was jeered from the public gallery during his apperance yesterday.

If you’re reading outside Australia and you haven’t followed the course of the commission, here is an excellent wrap of the preliminary findings.

One of the biggest talking points of the past 24 hours has been Donald Trump’s comments about the Federal Reserve and interest rate hikes. The president has described the Fed as “out of control” because he thinks it is increasing borrowing costs too quickly and putting pressure on the economy.

Greg McKenna, the independent Australian market strategist, has this salient point:

President Trump has captured the narrative by blaming the Fed for all these market ructions. But the reality is the economy his policies have overheated does need more rate hikes. Markets know that he knows that, but the Fed is the perfect foil in the run-up to the mid-terms.

If you need a more in-depth catch up on a dramatic day’s trading on Wall Street, you can read the wrap by my colleague Dominic Rushe here.

Good morning to everyone in Australia and Asia, and good evening to everyone else.

I’m Martin Farrer and I’m taking over the blogging reins from the the indefatigable Graeme Wearden.

The news from here is that more falls are expected in markets across the region, but so far not as dramatic as yesterday. The ASX in Sydney is seen falling 1.1% with around the same mark expected for the Nikkei in Tokyo. But who knows where they might end up if the dramatic swings in the Dow Jones today are anything to go by.

What we do know for sure is that the Aussie dollar has had a good crisis. Like Usman Khawaja, it is has risen to task and climbed nearly 1% in the past 24 hours to stand at US71.2c.

Donald Trump’s attack(s) on Fed chair Jay Powell make the front of Friday’s Financial Times:

US and European stock markets have been a veritable sea of electronic ink today, following the overnight rout in Asia.

Here’s the damage......

Unless something remarkable happens in the last 10 minutes, Wall Street is going to end the day deep in the red.

The Dow is having another wobble, now down 485 points at 25,119

Another twist! The Washington Post is now reporting that President Trump will meet with President Xi at the G20 meeting of world leaders next month.

This is lifting Wall Street off its lows, on hopes that relations between Washington and Beijing might be melting.

Things have been worse, though...

The S&P 500 index has had a bad day too, currently down almost 2% as market volatility spikes.

Some photos from in and around Wall Street today:

Nearly every one of the 30 companies which make up the Dow has lost ground today.

Pharmaceuticals firm Pfizer, fast food chain McDonalds, and energy companies Chevron and Exxon are among the big fallers.

Oh dear, the Dow is taking another leg downwards in afternoon trading.

It’s now shed 424 points, or 1.66%, 25,174 points.

That means the Dow has lost more than 1,200 points since the start of trading yesterday - a reminder that what went up can come down rather abruptly....

Fast FT points out that mining stocks have had a particularly bad 2018:

That partly reflects concerns over economic growth prospects, especially if a protracted trade war rumbles on.

More drama in the markets, this time involving Turkey:

Donald Trump regularly hailed the stock market boom as a sign that he was dong a good job. Now shares are falling, he’s determined to pin the blame on the Federal Reserve.

Bloomberg suspects the president has a motive....

Trump’s criticisms mark a stunning departure from the practices of his recent predecessors. Presidents for more than two decades had avoided public comments on the Fed’s interest-rate policies as a way of demonstrating respect for the institution’s independence.

For a president who has frequently invoked rising stock prices as affirmation for his economic policies, criticism of the Fed’s monetary policies lays ground for shifting blame elsewhere if the market slide continues. He’s escalating his attacks on the Fed with less than a month to go before elections that will determine whether Republicans maintain control of Congress.

More here:

Trading on Wall Street remains choppy.

The Dow is back in the red, down around 115 points (or -0.45%), while the tech-focused Nasdaq index is now slightly higher...

Jay Powell, incidentally, was Donald Trump’s pick to run the Fed.

The president could have reappointed Janet Yellen, Powell’s predecessor, but instead he favoured a change (even though Yellen had done a good job helping to heal the economy from the financial crisis).

Here’s the big picture tonight, and it’s not pretty:

The braver, or riskier, among you may see today’s losses as a buying opportunity.

I certainly don’t give investment advice. But Trevor Greetham of Royal London Asset Managment believes there are bargains out there:

It’s not surprising to see a sharp rise in volatility given the negative cross currents for markets. Global growth is slowing, US interest rates are rising and Trump’s trade war rhetoric is hotting up ahead of next month’s midterm elections. Longer term, we expect the economic expansion to continue into 2019 and this should ultimately propel stock markets higher. Investors should note that US tax cuts and spending increases are still feeding through, interest rates elsewhere in the world are very low and China is easing policy to offset trade war fears.

“Our multi asset funds have been defensively positioned since the early summer but we have started to buy equities on weakness after our investor sentiment gauge hit its most pessimistic reading since April.

As another old saying goes, investors should be fearful when others are greedy and greedy when others are fearful.”

Ouch! Italy’s main stock index seems to have plunged into a BEAR market - meaning it has fallen by 20% from its recent peak.

That shows how worried investors are about its government’s budget plans, and the row with the EU over fiscal targets.

European stocks market are also suffering deeper losses as the closing bell looms.

The Stoxx 600 index of top European companies is now down 2%, as shares get another mauling.

Issues such as the US-China trade wars, Brexit and the Italian budget row are all weighing on markets.

Professor Costas Milas of the University of Liverpool argues that this week’s “financial market turmoil is (long) overdue”.

He has sent over this chart, from Policyuncertainty.com, which shows how uncertainty has risenL

Profess Milas explains:

Global policy uncertainty has hit its highest level for more than 18 months now. In fact, September 2018 saw global policy uncertainty at a level comparable to what we saw during the Referendum vote!!!

The chart measures policy uncertainty in 18 countries that account for more than 70% of global GDP. Based on this plot information, I am surprised market reaction did not happen in late September or the very first days of October!

Hello... Larry Kudlow, the US president’s chief economic advisor, seems to have suggested that Donald Trump could meet with China’s president Xi soon.

Speaking on CNBC, Kudlow indicated that talks could take place at the G20 summit in November.

However, it seems that nothing is ‘concrete’, so don’t count on a breakthrough in the trade war yet....

If such

Wall Street is gyrating, as investors struggle to decide whether to stick or twist.

The Dow has now shaken off its early malaise, and is now up 50 points or 0.2%.

It could be a testing day....

Stuart Clark, manager at Quilter’s WealthSelect, reckons automatic trading systems helped to fuel Wednesday’s losses.

The sell-off really gained momentum quickly, especially toward the end of trading.

That can be a tell-tale sign that algorithm based strategies are kicking in and chasing a trend, which can fuel a rally or a sell-off. While that can’t be ignored, it is important to remember that reflects high volume, short-term trading and isn’t necessarily a reflection of the fundamental case for any given stock.”

Donald Trump’s treasury secretary has called for calm.

Speaking at the IMF meeting in Bali, Stephen Mnuchin steered away from the president’s criticism of the Federal Reserve.

Instead, Mnuchin suggested that Wednesday’s sell-off was a fairly normal event.

“Markets go up. Markets go down. I see this as a normal correction.”

Yesterday’s sell-off was bad, but it was hardly horrific. Here’s some context:

The S&P 500 index, and the tech-heavy Nasdaq, have also dipped into the red in very early trading....

Hold onto your hats... Wall Street is about to open for trading.

Will Hobbs, head of investment strategy at Barclays Smart Investor, reckons investors should ‘stay calm’ today, rather than panicking.

He argues that the world economy isn’t on the brink of a recession, so there’s no reason to dump your portfolio:

“Isolating the causes of sharp falls in stock markets is always a hazardous game. The reality is that such drops, as gut churning as they tend to be, are best seen as part and parcel of investing in capital markets. For long term investors, the rising trend is of course more important to focus on than the bumps in the road. For those trying to more actively trade the economic cycle, the key question is whether such volatility speaks of a darker economic turn for the US and world economy, a recession even.

For our part we still cannot see the next recession on the horizon in the indicators that we look at. Recessions can, of course, rain from clear blue economic skies, so humility is always appropriate. This is particularly the case as we enter a period where US interest rates approach levels where, if still some distance from asphyxiate, are certainly no longer accommodative for the world’s most important capitalist economy.

After a nasty pummelling, European stock markets are trying to climb off the mat.

The FTSE 100 has clawed back some losses, following today’s weaker-than-expected US inflation data. It’s still having a bad day, though, currently down 91 points at 7054.

Investors are pondering whether today’s sell-off is the start of a downturn, or a buying opportunity....

More news: the number of Americans filing new claims for unemployment benefit has risen.

Some 214,000 US citizens filed an ‘initial claim’ for jobless help last week, up from 207,000.

That could be another reason for the Fed to keep its hand off the trigger..

The oil price has also been dragged down today.

Brent crude has sled $1.5 per barrel, or almost 2%, to $81.57.

That reflects concerns that trade wars and higher US interest rates could hurt global growth.

Here’s a video clip of the head of the IMF defending America’s top central banker against Donald Trump’s claim that the Federal Reserve has ‘gone crazy’:

Tech has been the golden child for markets this year. But now it’s being disowned by investors, who rushed to ditch internet giants like Amazon (down 6% yesterday), Apple (which dropped 4.8%) Netflix (which shed 8%).

One theory is that people are taking profits - there’s a temptation to cash in your winning stocks when you see shares diving.

Another theory is that tech firms will suffer particularly badly from a full-blown trade war, which looks increasingly likely unless Washington and Beijing start mending fences.

Thirdly, some technology stocks are highly-leveraged, having issued large amounts of debt to fund their growth. So if US interest rates keep rising, their borrowing costs could become rather higher.

Even crypto-currencies are being caught up in today’s selloff.

Bitcoin has shed 5% today to trade around $6,200 at present, down $300 today.

Helal Miah, investment research analyst at The Share Centre, says investors have been speculating for weeks that a correction was coming - and now “we’ve talked ourselves into a sell-off”.

Miah pins the blame on trade war fears, and the prospect of higher US borrowing costs:

“The sell-off has been gathering strength for about two weeks now lead by the Asian markets as concerns were raised about China’s growth rate, but fingers will also point at the hike in tariffs between the US and China and the impending trade wars.

“But for us and many other analysts, a market sell-off was always going to be most likely as a result of the rising interest rate environment, especially in the US. We had the much expected hike in September from the US Federal Reserve now taking interest rates to 2.25% with the expectation that the policy makers will keep in their path of steady rate hikes as the US economy strengthened.

But with unemployment recently hitting 3.7%, and as signs slack in the economy and with the labour market disappearing, there is the expectation that prices and inflation could start running ahead of the Fed’s expectations.

As a result, the policymakers may now think about increasing rates at a faster pace than anticipated.

Over in New York, financial workers will be rising early and inspecting the damage across the global markets.

Wall Street got an early taste of the rout, of course, when the Dow plunged by over 800 points in late trading on Wednesday.

US traders can now see that the shockwave rippled to Asia, sending major indices down by 3%, and then Europe, where the Stoxx 600 is down 1.8% now.

And the bad news is that New York is expected to suffer fresh losses today. The futures market suggests the Dow will fall by another 1%, when trading begins again, in three and a half hours time.

Just in: A group of leading developing countries are calling for an end to the trade wars that have gripped the global economy this year.

The G24, which includes China, India, Brazil, Mexico and Argentina, say the global trading system should be reformed, not smashed up.

In a statement issued in Bali, alongside the IMF’s meeting his week, the G24 warn that emerging markets are suffering:

“Trade uncertainties and financial and monetary conditions compound rising debt vulnerabilities.

Improving debt sustainability depends on a supportive external trade and financial environment, timely contingency financing and the adequate flow of concessional financing for low income countries.”

Back in the UK, a new Bank of England survey shows that it’s harder to get access to credit, as lenders tighten up:

There’s no relief in the City.

After two hours of bruising trading, the FTSE 100 sinking deeper into correction territory, down 123 points or 1.7% at 7022.

Fiona Cincotta, senior market analyst at City Index, says investors have been perturbed by New York’s 3% slump yesterday.

Wednesday’s plunge on Wall Street came as a shock and global markets are now readjusting. Sellers shaved 830 points off the Dow Jones Industrial Average and 4% of Nasdaq with big tech names like Amazon, Intel and Microsoft bearing the brunt of the decline. The picture is not looking much better this morning. The Nikkei and the Shanghai Composite closed over 4% and 5.7% lower respectively, the FTSE started the day with a 1.19% decline and continued to sink from there.

She also explains how the recent rise in US bond yields - because investors expect higher inflation and interest rates - is now hurting stocks:

The plunge in US stock markets comes after a long run of almost undisrupted gains on Wall Street which were bound to come up for a correction. The strong US economic background that has supported share prices this year is now working against that same market. Rising interest rates are fuelling concerns that higher borrowing costs will erode the margins of US companies and with the domestic labour market at its strongest in nearly 50 years, wage pressures are filtering into companies’ costs.

The 10-year Treasury yield is used as a reference price for mortgages, car loans and other consumer debt and a spike in those yields is hitting industries like car makers and house builders that are exposed to consumer borrowing.

Paul Donovan of UBS Wealth Management blames the Wall Street sell-off on Donald Trump’s decision to impose tariffs on Chinese goods:

US equities seem to be (finally) reflecting the cost of US President Trump’s trade taxes. Around 80% of global trade involves multinational (generally listed) companies. A bit less than half of S&P earnings come from outside the US.

However, listed companies are only 25% of the US economy. Equities are at greater risk than the economy if trade is taxed aggressively.

Here’s a taste of the mood on the trading floors today:

China’s stock market has closed at its lowest level in almost four years, as the trade war with America continues to bite.

The Shanghai composite index ended the day down 5.2% its heftiest rout in over two years.

Trading screens were a sea of green, not red, though (as red is a lucky colour, it is used to show rising prices in China)

Housebuilders and financial stocks are among the big fallers in London this morning:

Hussein Sayed, chief market strategist at FXTM, argues that Trump must take some of the blame for the market losses:

While I agree with President Trump that Wednesday’s selloff is the fault of the Fed, he should be reminded that the trade war he started with China and re-imposing sanctions on Iran is also to blame. His actions helped building inflationary pressures and the Fed cannot stand still when it sees the economy overheating.

A steeper selloff in equity markets will probably lead to a pause in hiking rates, but the Fed will be more concerned about the overall economy performance than just equity prices.