But after the state-owned company charged with buying shares to prop up prices announced it would not intervene every day, the Shanghai index fell 11.5 per cent last week. As the slide highlighted on Monday, those efforts have not been a success.
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“I regret not having fled the market last week”, said a retail investor who identified herself only by her surname, Zhang. The gloom was shared across the region.
Chinese trading screens were bathed in a sea of green – the colour of falling prices in the country, where red has positive connotations and marks rising values – as the benchmark Shanghai Composite Index plummeted 8.49 percent, or 297.83 points, to 3,209.91, below its closing level on December 31 past year.
Hong Kong’s main index was down 4.89 percent in late trade.
“Stock markets are often said to be leading indicators of the global economy”. Shockwaves from the latest selloffs in Shanghai and Shenzhen have rippled across currencies, commodities and Asian bourses. Tech darling Xero plunged to its lowest level in two years.
Asian stocks headed lower Monday, sparking fears of another bloodbath on Wall Street in the wake of Friday’s sell-off. The move raised concerns that China’s slowdown could be worse than previously appeared, a development that would have far-reaching effects, given China’s increasing economic importance to Asia and the rest of the world. “But it is questionable whether even with one the market would have rebounded”.
‘While Chinese growth is a concern for global growth, we still believe the Chinese authorities have the firepower to contain downside risks. China’s surprise move to devalue its yuan two weeks ago-which would make its exports more competitive-and a string of weak economic data has tipped off worries that the world’s No. 2 economy may be slowing faster than expected.
The offshore yuan market also came under renewed pressure as global investors flee to save havens. Gold is likely to continue going up, especially as more news about China comes out, which looks worse by the day. The preliminary purchasing managers’ index reading for China was released and it showed a 77-month low at 47.8.
“This is already a small-scale stock market disaster”. That sent the Dow Jones Industrial Average DJIA, -3.12% and Stoxx Europe 600 index SXXP, -2.53% into correction territory.
There is also an issue with the US stocks, which are selling off like hotcakes, and this is definitely a worrisome sign, and this is a major reason why gold has started to go up again. Despite this, the market continued to slump.
China’s benchmark Shanghai Composite index is down more than 8 percent in Monday trading.
“Investors are taking a safety first approach to the stock market given the potential for instability related to capital flight from emerging economies”, Ric Spooner, a market strategist for CMC Markets, said in a commentary.
China’s stock market has fallen by its biggest margin in eight years, defying Beijing’s multibillion-dollar intervention to stop a slide that has wiped out the gains of this year’s price boom.
“The entry of the pension fund will take a long time to happen”, said Qian. The Turkish lira, its plight exacerbated by domestic political developments and a central bank suggesting it would take rate hike cues from the U.S. Federal Reserve, languished near a record low. “Economic activities remain weak and the likelihood of an imminent RRR cut has increased”, Li-Gang Liu, the chief economist for China at the Australia and New Zealand Banking Group, wrote Monday in a research report.
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“We shouldn’t doubt the government’s ability to rescue the market”.
