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CCTV Script 14/01/2016

– This is the script of CNBC's news report for China's CCTV on January 14, Thursday.

Welcome to CNBC Business Daily, I'm Qian Chen.

Almost $3.2 trillion has been wiped off the value of stocks around the world since the start of 2016, according to calculations by a top market analyst.

It has also been the worst-ever start to a year for U.S. equities, said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, as both the S&P 500 and the blue-chip Dow Jones industrial average have posted their steepest losses for the first eight days trading of a year.

According to the veteran market commentator, U.S. stocks are now off $1.77 trillion, while overseas stocks are down $1.4 trillion.

Here in Asia, markets have been very volatile today, with events of a 6.7-magnitude earthquake in Japan this morning and blasts in Jakarta, Indonesia.

[MARTIN (t) LAKOS CLN STREET SIGNS 1200 Macquarie Private Wealth Division Director] "121811 These sort of events are very difficult to deal with for the markets.I guess to some extent, we are looking, if we take a step back, we are really looking quite closely at the divergence, between what we've seen what's hapenning in the real economy, and how the markets are really trading. 121830 And the divergence is continuing to widen now. I'm not say markets cant go lower, given the currenct level sentiment, and the sentiment is pretty negative, as we know. 121839 "

China, however, is the winner of the day, with the Shanghai Composite Index ending up by xx%.

Offering some sign of stability in a generally volatile market, the People's Bank of China (PBOC) set Thursday's yuan mid-point rate at 6.5616, compared with Wednesday's fix of 6.5630. The dollar-yuan pair was nearly flat at 6.5777.

A plunge in Chinese stocks has been blamed for the awful beginning to the year that U.S. stocks have suffered. And while many have protested that this is an overreaction, given that Chinese stocks haven't tended to enjoy a tight relationship with American equities, those people appear to be living in the past.

Take a look at this correlation chart.

Recall that correlations run from -1 to 1, with 0 indicating no relationship, 1 expressing perfect correlation, and -1 reflecting exact opposition.

Over the past five years, the correlation between the weekly moves made by the two indexes is 0.05 - essentially nothing.

But something strange has happened on the way to U.S.-Chinese indifference.

Starting with the August crash in Chinese markets after that country's currency devaluation, the correlation between the S&P and the Shanghai composite has risen precipitously. Since then, the relationship has simply gotten tighter and tighter - and in 2016, the one-year correlation of weekly moves has reached fresh heights.

However, the trouble with mapping relationships between two volatile data sets in an ever-changing world is that the relationship is itself highly volatile, as can be seen above. For now, analyst DARYL LIEW thinks market sentiments still weighted more than the fundamentals.

[DARYL (t) LIEW CLN STREET SIGNS 1200 REYL Singapore Head Of Portfolio Management ] "111118 Not so much fundementals. There are some people questioning export, import numbers that came out yesterday, questionable whether thats due to currency shifts, you know, from China out to Hong Kong, having said that, the economies number coming out from China is not so bad, you know, it looks like the economy there is stablizing. 111137"

CNBC's Qian Chen, reporting from Singapore.

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