Loading ...All or nothing at all markets–quietly-without much fanfare, China dropped 3% last night…amidst incredible complacency.
Analysts said investors are concerned about a slump in China’s bond market spilling into equities as authorities step up a campaign to reduce leverage. The government’s message that Kweichow Moutai Co. shares were rising too fast has also sent ripples across the market. Still, the downside may be limited as the slump could attract buyers on the hunt for oversold shares.
The CSI 300 Index slid as much as 3.3 percent Thursday and closed down 3 percent, its biggest loss since June 2016. The ChiNext Index fell 3.2 percent, the most in four months. The Shanghai Composite Index and Shenzhen Composite Index both also tumbled more than 2 percent.
Dickie Wong, executive director of research at Kingston Securities Ltd.
- Could say this is a correction but “I don’t think it’s a market meltdown”
- Sentiment is still okay, but after recent gains it’s time to pull back. State-owned enterprises have announced earnings and share prices were quite high
- Following the state media warning about Moutai, investors don’t want to be too bullish
- “I don’t think the government needs to step in. The yuan is stable and the stock market has been doing well”
“Federal Reserve officials expressed largely optimistic views of economic growth at their most recent meeting, but also started to worry that financial market prices are getting out of hand and posing a danger to the economy.”