The fall could have been exacerbated by a private survey showed factory activity in the Asian giant had contracted this month at its fastest pace, staying at 47.1 points as part of a reduced domestic demand and exports.
“What China can no longer deny that there is a slowdown in its economy,” said Andres Felipe Cortazar, director for Latin America of Smart Group Asia, adding that this is one stock market crash “The first thermometer of the economy.”
According to the expert, “the real concern is when real estate investments begin to lose their value, as these represent a high percentage of national GDP and could create great difficulties for next year.”
During these months, investors and analysts bet on the stability of the yuan to China’s efforts to get the IMF include the Chinese currency in the basket of reserve currencies, or SDRs, among which you are already the dollar, the Japanese yen, British pounds and euros.
However, the refusal by the international body adds to the fears of investors about monetary measures to be adopted by China to control the volatility of the equity in the country.
According to Germán Nova, director of the graduate of economy, trade and culture of Asia-Pacific, “what is happening with the stock market of China is an adjustment in real stock prices”, Nova believes the government will launch with more measures to contain the massive capital flight. “Can that there is a new and higher depreciation of the yuan, in order to stimulate exports and is expected to stimulation of domestic consumption are made.”
Among the bags most affected with the new fall they are the Hang Seng index in Hong Kong that collects a monthly decline of 12.88% and the German Dax which closed Friday with a fall of 11.63% month. Also, the Ibex closed with a 2.98% plunge again and already has four downward sessions, losing all won in 2015. With this decline, recorded in the week a deficit of 5.6%.
Among the measures the Chinese government had started a few months ago to support this collapse were the three devaluations of the yuan, made between 10 and 12 August from 4.4% in addition to an injection of about US $ 80,000 million at the stock market, through the Finance Corporation of China Securities Market during June. While the current price of the yuan against the currency of reference is 6.38, Goldman Sachs believes that the yuan will reach 6.60 per dollar in the next 12 months, while ANZ Bank expects the yuan is placed in 6.55 against the dollar at the end of this year, confirming that the situation for 2016 could be even more critical. According to experts, it would be a novelty that the government began developing a new wave of infrastructure projects as part of its strategy of rescue.
The other important reason is that overshadows markets political instability Queen in Greece. When it seemed that the waters had returned to normal, the Greek prime minister, Alexis Tsipras, calling for early elections for September and presented his resignation.
In Colombia also feel the aftershocks of the situation, with a fall in the stock 8.29% in the month and a peso devaluation that has already surpassed the barrier of $ 3,000 per dollar. Although experts caution that the impact on the region is also related to the decline in oil prices and expectations of a rise in interest rates in the United States.
The barrel WTI low of US $ 40
Crude prices closed its eighth consecutive week lower, its worst streak since 1986, which has already achieved a reduction of 33%.
According to the analysis published in Expansion, the West Texas barrel of US benchmark, ended down 2% to US $ 40.45, but during the session it traded as below the psychological barrier of US $ 40 for the first time since February 2009, during the financial crisis. Meanwhile, Brent fell 2.5% to the edge of US $ 45.46 and the last five sessions has made 7%.
One of the main factors that pushed Friday such drop in more than six years is the wrong data manufacturing activity in China.
reviews
Andrés Felipe Cortazar
Director for Latin America Smart Group Asia
“The concern is not the subject of the bag but what can happen in the real estate sector, which accounts for the largest investments in China.”
German Nova
Expert Economy, Trade and Culture Asia-Pacific
“It’s expect that if this fall in the stock continues, the Chinese state intervention intensifies through infrastructure and devaluation. “
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