In what is becoming a theme, at least for this week, Chinese stocks suffered heavy losses again in Thursday trade.
The Shanghai Composite tumbled 482 points, or 3.66%, while the Shenzhen Composite slumped 208 points, or just over 4%. Making those losses look small the ChiNext index, dubbed China’s “Nasdaq”, crashed 6.33%. Not only was the decline on ChiNext the largest in percentage terms since December 12, 2013, the index has now lost 13.38% since June 5.
Here’s the daily chart of the ChiNext index from the past year.
Eleven Chinese companies – including brokerage giant Guotai Junan Securities – start taking investor subscriptions for initial public offerings on Thursday, and nine will follow suit on Friday, putting pressure on market liquidity, according to a report from Reuters.
The selling of established stock to fund purchases in these IPOs likely amplified the scale of today’s losses.