Shanghai market now down 20% from the interim peak. Are we headed for the same?
The Shanghai Composite Index lost 4.3 per cent to 2,785.58, as China Shenhua Energy Co., the nation’s largest coal producer, sank 6.8 per cent, the most since Feb. 18, and Citic Securities Co., the biggest brokerage, sank 7.8 per cent.
The gauge has slumped 19.8 per cent since this year’s high on Aug. 4, after more than doubling from November’s low as China rolled out a 4 trillion yuan ($585 billion) stimulus package. A plunge in new bank loans in July, disappointing earnings and concern the government will seek to damp property market speculation has sapped confidence.
“It’s irrational selling that has shattered market confidence,” said Larry Wan, Shanghai-based deputy chief investment officer at KBC-Goldstate Fund Management Co., which oversees about $583 million in assets. “Some mutual funds have been reducing their stock holdings as they are pessimistic about the economic outlook.”
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.