NEW YORK: Top global markets ended the week Friday largely recovered from China-induced panic selling, but market watchers remain worried the turmoil in the world's number two economy will drag down global growth.
After a bout of violent selloffs, the final tally for many stocks was deceptively benign, with the US and European equity markets actually mustering gains for the week, although the Shanghai index lost 7.85 percent over the same period.
And worries about China kept enthusiasm at bay, as investors pondered how slower growth there would affect slumping commodities, such as oil and copper, as well as the economies of its Asian neighbors and the US and other trading partners.
"There still does not seem to be the macro foundations for indices to fully recover from their corrections, as concerns over China and uncertainty over Fed rate hikes continue to linger," said IG Markets analyst Angus Nicholson.
On Friday, Moody's slashed its 2016 growth forecast for leading G20 economies to 2.8 percent from 3.1 percent, predicting contractions in Brazil and Russia and lower demand for manufactured goods in Korea and Japan due to China.
"Slower growth in China makes a significant rebound in commodity prices in the near term unlikely," said Moody's senior vice president Marie Diron.
"A more prolonged period of low commodity prices will lead to muted export revenues and investment for commodity-exporting G20 economies."
US Federal Reserve Vice Chair Stanley Fischer told CNBC it was "too early to tell" whether the markets turmoil sparked by China has lessened the argument for a long-expected increase in the federal funds rate.
"The concern is that there are a lot of countries influenced by trade with China," Fischer said.
"East Asia is particularly associated with that. The question is whether interactions among those countries will amount jointly to something that would have an impact on us."
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