It’s a rarity that we see two big down days in a row for Chinese stocks, but that’s exactly what’s happened on Tuesday.
The Shanghai Composite closed the session down 3.5% at 4888.65, taking it’s two-day decline to 5.4%. Elsewhere the CSI 300 dropped 3.0% while the tech-heavy ChiNext index slipped 2.85%, taking it’s 2-day slide to 7.93%, the largest seen since December 22 last year.
While all three indices have fallen heavily this week, putting the declines into perspective, year-to-date they are all higher by 51.1%, 144% and 43.3% respectively.
Losses for the session were broad-based with the worst performances coming from the information technology, industrials, materials and technology sectors.
While it is often hard to pinpoint the reason for day-to-day gyrations in Chinese stocks, the launch of 25 initial public offerings this week, something that could lock up to 7 trillion yuan of capital according to a report from Reuters, may be behind the steep falls seen today.