China’s hundred million investors were highly disappointed as the stocks slipped. Even though efforts were made to lock down nearly half of the market. Slipping down by 6 percent on Wednesday, there were around 46 per cent of the listed companies who halted the trading to avoid the further loss and embarrassment.
Coming nearly after three weeks of the downslide, it erased off nearly 32 percent of the value.
In the deeper precision, Shanghai composite fell 5.9 percent at 3,507.
The index has lost 32 percent since its highest form in mid June. On the other hand, the Hong Kong market which is relatively unaffected has slipped by 5.8 percent. This great void, can affect China’s buying powers from the international market, thus resulting in the world wide gloom.
“This bull market was engineered by the government to reduce the cost of capital, incentivize the innovation and to deepen the economic forum.” Oliver Riu, professor of finance and accounting at China Europe International Business school told TOI.
“Unfortunately, it’s benevolent initiative has been hijacked by a group of greedy individual investors in using high leverage.” He said.
In this way, “greedy investors” are pouring in.
Concerns and ideas are being discussed as these crisis and probable to affect the wider economy.
The State council which is China’s main cabinet has closely looked in the situation with the premier Li Keqiang and shown relative confidence in the present economic situations.
“Positive signs have been increasing in the last two months and structural readjustment has been accelerated.” Said the council.
“China’s fiscal and monetary policies have been taking effect, while both development momentum and risk prevention capabilities were strengthened.” In the words of the council.
The impacts of this on the Indian markets are assumed to be quite limited, ” according to Nimesh Shah, MD and CEO, ICICI Prudential Mutial Fund, ” As of now the structural impact on India looks limited. The volatility in the Chinese stock market can affect India via two channels- the commodity prices and capital flows. The macro scenario generally benefits from reduction in commodity prices. Emerging market funds may move from China to India though this may be neutralized if flows into emerging market suffers.”
Tags: China stock market
