Chinese stocks have been hammered again

Fresh from a mammoth decline on Tuesday, Chinese stocks have continued their slide on Wednesday.

At the mid-session break the benchmark Shanghai Composite index is off 3.12%, adding to the 6.1% fall seen yesterday.

Earlier in the session the index fell as much as 5.06%, taking the two-day loss to 10.92%.

The index suffered a technical correction of more than 10% in less than two trading sessions.

While unbelievable to those in western markets, movements of that magnitude are quickly becoming the norm in China’s stock market.

Of the sectors only telecommunications, having been punished yesterday, is higher. It’s put on a nifty 5.57%, but it is the exception to the price action seen elsewhere.

IT, energy, industrials, consumer cyclicals and materials are all off by more than 4%.

The weakness in Shanghai is extending to other bourses with the CSI 300 and 500 indices, comprising the 300 and 500-largest listed firms in Shanghai and Shenzhen by market capitalisation, lower by 2.20% and 3.61% respectively.

The SSE 50, brimming with large-cap stocks listed in Shanghai, is the relative outperformer, falling only 1.85%.

To the south, the Shenzhen Composite and tech-heavy ChiNext indices have both fallen more than 2.5%.

While it is unlikely to fully explain the continued selloff in stocks, China’s commerce ministry added to investor gloom on Wednesday by suggesting exports could continue falling in the months ahead, according to a report from Reuters.

“The possibility of exports to see year-on-year decline in some months could not be ruled out. But we will still see export growth for the whole year,” said Shen Danyang, a commerce ministry spokesman.

“For the whole year, the foreign trade will face more severe situation than we expected”, he added.

Earlier in the session the PBOC fixed the USD/CNY rate at 6.3963, slightly above the 6.3930 closing level of Tuesday.

It is currently trading at 6.3979, indicating a slight weakening in the renminbi.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.