Chinese stocks suffered their greatest defeat in eight years and spread to global markets – Financial Journal

Online Financial Journal / expansion

The week begins with a resurgence of financial alerts in China. The CSI300 index closed the day with a setback of 8.6% to 3,818 points, while the Shanghai Composite Index has slumped 8.5% to 3,725 points.

In both cases it is the biggest one-day drop in more than eight years, namely since 27 February 2007. According to Reuters data, 2,247 listed companies have registered declines in today’s session, and only 77 companies have managed to dodge descents. According to Bloomberg, 1,700 stocks suffered falls of more than 10% (the limit with which sosn suspended).

The disaster also has focused on the latter part of the session. A lack of time for the end of the day declines are ‘moderated’ at around 3%. But the final downward spiral has multiplied losses to end 8.5%.

The avalanche of sell orders fully reactivated alerts that were generated Bag China in the last month. In just three weeks he accumulated a 30% higher crash.

The fear of outbreak of a stock market bubble in China has increased with the latest macroeconomic data. Last Friday was published the biggest contraction in 15 months the industrial sector. This slowdown is also transferred to the business. The profits of industrial enterprises decreased by 0.3%.

“New weaknesses of the Shanghai Stock Exchange, which fell to lows since 2007 creates new expectations of a slowdown in the Chinese economy, which still does not exceed the structural problems as excess industrial capacity and ailing housing market, “said EuroAmerica.

The collapse of the stock caught China inexperienced local retail investors, and its effects may aggravate symptoms of weakness that reflects the Asian giant’s economy . The biggest fears are focused on a possible further slowdown in consumption.

The Shanghai Composite Index, suffered the setback today, deflated by 28% from the year highs reached last June 12, when It touched 5,178 points.

World Markets

The collapse of Chinese indexes contagiaban global markets. The Tokyo Stock Exchange, the largest in Asia, posted a loss of 0.95% while the Hang Seng in Hong Kong lost 3.09% reached.

In Europe the most important actions wrote down losses of 1.67% and the square of Milan was the most affected with a contraction of 1.89%

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