Chinese stocks were among the biggest casualties in a broad sell-off across Asia on Friday. It was a stunning reversal for Chinese shares, which investors had been snapping up only days before.
Futures contracts that track stocks in the United States traded higher during the European day, suggesting that investors might be more optimistic when trading began there on Friday.
If the American markets do move in that direction, it would be a welcome relief for investors. After the rout in the United States on Thursday, both the Standard & Poor’s 500-stock index and the Dow Jones industrial average were in correction territory, down more than 10 percent from their recent peaks.
The turbulence appears largely to be a product of a global economy that is humming along. For the first time in a decade, all major economics in the world are growing in sync. China has shown signs of accelerating growth, and recoveries in Japan and Europe have proven sustainable.
Investors are now growing nervous that central banks will raise interest rates in a bid to keep inflation at bay. If policymakers move too quickly, their efforts could temper the global growth.
One possible explanation for the losses in Europe was official data from Italy and France showing solid growth for manufacturers. That might have been enough for some investors to start worrying again that the European Central Bank would ease off on stimulus to the eurozone economy sooner than expected.
Whatever the cause, there is now little doubt that markets are jittery.
After being lulled into a sense of complacency by years of steadily rising stocks, even small worries can snowball into a bad day for stocks. The losses can then feed on themselves in a financial industry dominated by computerized trading systems, with the weakness in the United States spreading around the world.
“Asia is going to be the tail that gets wagged by the U.S. dog,” Timothy Moe, chief Asia Pacific strategist at Goldman Sachs, said on Friday.
As with stocks in the United States, Chinese shares have surged in recent months, on the back of a strong economy. An improved global outlook has led to more buying of Chinese exports. The authorities also seem to have slowed what had been an alarming borrowing binge.
But the Chinese market does offer reasons for concern. Investors kept a careful eye this week on China’s currency, the renminbi, which is carefully managed by the Chinese government. It took a hit on Thursday, falling as much as 1.2 percent before strengthening a bit on Friday.
Before that, the renminbi had been rising steadily against the American dollar, leading to worries that Beijing might step in further to contain it. World markets can be sensitive to sharp swings in China’s currency.
The tough day of trading on Friday put Chinese shares by some measures into correction territory. “We are witnessing the longest rally in the history of Chinese stocks,” analysts at Goldman Sachs wrote to clients early this week, adding, “A tactical correction appears overdue, and markets could fall further.”
Shares in Shanghai fell about 4 percent on Friday, while Hong Kong shares lost 3.1 percent. Shares in Tokyo fell 2.3 percent. In Europe, stocks wavered, off more than 1 percent in afternoon trading.
In the logic of stock markets, bad news can sometimes be good news. Recent gains in the value of the euro against the dollar and other major currencies were expected to slow exports and potentially put the brakes on the eurozone economy.
Slower growth would, in turn, dissuade the European Central Bank from raising interest rates too soon, prolonging the cheap money that has been partly responsible for the bull market.
“The E.C.B. has, in fact, a vital interest in keeping euro area interest rates at low levels,” Ralph Solveen, an analyst at Commerzbank, said in a note to clients on Friday.