China stocks and commodities cap terrible July

Stocks in China capped a miserable July by falling again on Friday (July 31st), while commodities continued to plumb multi-year lows.

The Shanghai Composite Index slid 1.1 per cent, as stocks ended their worst month in six years to finish down 15 per cent for July.

Stocks across Asia have had a rough ride lately. Hong Kong’s Hang Seng has fallen 14 per cent in the last month.

Meanwhile, stocks in Europe were headed to end the month up four per cent, following a deal that looks like keeping Greece in the eurozone.

The dollar has also been on the up throughout July, boosted by expectations the Federal Reserve is moving towards hiking rates this year.

Fed chair Janet Yellen gave a strong hint the US central bank will pull the trigger in September, but markets remain unsure if it will wait until December.

The dollar index, which measures the greenback against a basket of currencies, was poised to finish up two per cent in July. The euro dropped a cent against the dollar in July, while the pound was down almost two cents.

Dollar strength has compounded commodity weakness stemming from depressed economic indicators from China.

Gold re-approached a five-and-a-half year low on Friday, while copper continues to languish in a six-year trough.

Societe Generale strategist Alvin Tan told Reuters: "Essentially they have been on the downtrend for a month and of course we have been on a roller coaster ride in China equities and that has affected sentiment."

Miners were among the big losers again, with platinum miner Lonmin dropping almost eight per cent in London as the depressed metals market continued to weigh. Platinum prices dropped ten per cent in July.

Oil was also lower on Friday, with Brent crude down one per cent to trade just below $53 a barrel. US light crude dipped two per cent to fall below the $48 handle, down approximately $10 for the month.