Chinese stocks tanked again to cap off a miserable week, and are now at their lowest since 2016

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  • The Shanghai Composite index in China has fallen every day this week.
  • The index is now at the lowest level since January 28, 2016.
  • Capital Economics expects the index to continue its decline in the second half of the year.

China’s Shanghai Composite index fell again today to cap a five-day losing streak.

The benchmark index fell 1.33% in Friday trade. The index was down 4.5% for the week with the bear market in Chinese stocks showing no signs of abating.

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Stocks in Shanghai how lost around 25% from the highs reached in late-January, amid trade war fears and a domestic deleveraging campaign by Chinese authorities.

Once again, declines were led by China’s tech sector, as the tech-focused ChiNext index fell by almost 2% to finish the week around 5%.

Today’s falls came despite follow a strong lead from global markets, following reports of further US-China trade discussions and steadiness in the Turkish lira.

Chinese currency — both the offshore traded (CNH) and onshore traded (CNY) — held steady at just below 6.8 per US dollar.

At a closing level of 2,669.10, the Shanghai Composite fell to its lowest level since January 28, 2016.

In a client note, economist John Higgins from Capital Economics said he expected the index to fall to 2,500 by the end of the year.

Higgins sighted China’s sluggish economy — key economic data missed estimates earlier this week — and the ongoing US trade dispute as the main catalysts for further falls.

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