Instability in China, North Korea and the Middle East, could lead to a "lean 2016" for investors

Markets show no real signs of calming after the most unstable opening to a share trading year in this century

Instability in China, North Korea and the Middle East, could lead to a "lean 2016" for investors

Chinese investors monitor stock prices at a brokerage house in Beijing | Image: Mark Schiefelbein / AP/Press Association Images

Asian stock markets remained jittery overnight with most major exchanges such as Tokyo closing down by close to 1%, trading was not helped later in the session by news from North Korea claiming that it was about to launch a hydrogen bomb test.

The CSI 300 index of leading mainland China shares closed 1.6% higher, this was the second night of positive gains following Monday’s collapse.

With the US Geological Service saying that it detected unusual seismic activity which could have been caused by a North Korean bomb test, renewed tension in the Middle East, and the absence of any positive economic indicators, Western markets are expected to slip lower again today following a day of stable trading yesterday.

The S&P 500 in the US closed up 0.2% yesterday while the Stoxx Europe 600 rose by 0.6%.

It’s the most volatile January start to global stock market trading since 1999 and according to Aidan Donnelly of Davy Stockbrokers.

Speaking to Breakfast Business, he said that there are "so many balls up in the air right now" that investors are unsure what to do with their money.

He warns that this volatility could be "here to stay" after two years of relative calm on global markets - he adds that it could be a "lean '16" for some investors if the market remains open to the major daily swings which we have seen in the opening days of trading.

Chinese authorities have already pumped 130bn yuan (€18.4bn) into the country's financial system through its open market operations after Monday's sell-off. This has led to a solid depreciation of the yuan.

The country has also announced the extension of a ban on the sale of stocks by large shareholders which was due to expire on Friday. These rules were first introduced in early July after a short spell of panic selling.