Wall St sell-off prompts global rout

A stock market panic that started on Wall Street swept through Asia on Thursday, knocking down indexes in Japan. [Photo provided to China Daily]

A response to recent tit-for-tat tariffs between the US and China, which may hamper US companies' third-quarter results in affected sectors, also played a role in the recent US share sell-off, according to UBS Securities.

"The US market sell-off last night spooked sentiment and rekindled memories of similar trading sessions at the beginning of this year," said Medha Samant, Fidelity International's investment director for Asian equities. "This negative sentiment could likely roll over to the Asian markets in the short term, as slowing global growth, a strong dollar and protectionism are already weighing on sentiment, especially for emerging markets and currencies with vulnerabilities."

Affected by external fluctuations, Chinese A-shares may continue to face short-term shocks. But these are not expected to last long amid efforts to maintain proper liquidity levels and open up financial markets to usher global funds into the domestic market, according to analysts.

"Like before, the Chinese stock market may continue to fluctuate with external impacts, but major risks are concentrated in the short-term," said Wang Youxin, a Bank of China analyst.