China suffers worst one-day stock market fall since crash of 2007

The Chinese stock market Shanghai Composite Index fell 8.5% today over concerns that government efforts to prop up equity prices would prove unsustainable.   The index had rallied 16% since the government announced unprecedented measures to support stocks last month including suspending trading on more than 1,400 companies, banning major shareholders from selling and funding a state owned vehicle with $480bn to support stock markets.   Whilst falls of this magnitude are sure to unnerve global investors we do not expect significant contagion into western markets nor do we hold any direct exposure to the Chinese equity markets.   At the time of writing European equity markets are showing modest declines.