Bad quarter for stocks; dire one for commodities

Тhe third quarter has been a bad one for global markets, with a rout in commodities putting the asset class among the hardest hit by China slowdown fears and U.S. interest rate uncertainty.

Copper prices plunged to a six-year low earlier this week, while Brent crude oil prices were on course for a 23 percent fall during the period.

"We've pushed raw materials down so far, we must be getting to the point where they start to base out," Marc Ostwald, a strategist at ADM Investor Services, told CNBC on Wednesday.

"Are we going to see great things for commodities in the fourth quarter? No. Are they going to be the disaster area that they were in the third quarter? No," said Ostwald. "We're unlikely to get a broad rally and there will be more volatility."

Analysts said that growing signs of weakness in China's economy has prompted investors to rethink the value of a host of commodities.

These valuations have long been driven by strong demand from China, which is the world's second largest economy and the world's largest consumer of many of these raw materials.

"We've pushed raw materials down so far, we must be getting to the point where they start to base out," Marc Ostwald, a strategist at ADM Investor Services, told CNBC on Wednesday.

"Are we going to see great things for commodities in the fourth quarter? No. Are they going to be the disaster area that they were in the third quarter? No," said Ostwald. "We're unlikely to get a broad rally and there will be more volatility."

Analysts said that growing signs of weakness in China's economy has prompted investors to rethink the value of a host of commodities.

These valuations have long been driven by strong demand from China, which is the world's second largest economy and the world's largest consumer of many of these raw materials.

"Everyone is negative; everyone is positioned for weakness in commodities and emerging markets so at some point there will be an opportunity for a rebound," Valentijn Van Nieuwenhuijzen, head of strategy at NN Investment Partners, told CNBC on Tuesday.

"It's still early for it, but there could be some bottom fishing," he said.

Analysts said uncertainty about when the U.S. Federal Reserve would lift off on a long-awaited interest rate hike would remain a headwind for commodity markets in the fourth quarter.

The Fed left rates at a record low earlier this month and took markets by surprise with a dovish statement that expressed concerns about the state of the global economy. Comments from Fed speakers since then, however, have suggested a hike this year could still be on the cards.

"Over the last two weeks, basically since the Fed's 'no move', there has been a fear factor driving markets rather than an underlying shift in the global economy," Van Nieuwenhuijzen said.