China stock market continues to slide
Chinese stocks have tumbled again after their biggest decline in eight years, but other Asian markets rebounded from a day of heavy losses.
The Shanghai Composite Index fell 6.4% in the first minutes of trading but later trimmed some of those losses and was down 5.5% at 3,035.83. The Shenzhen Composite Index for China’s smaller second exchange lost 4.6%.
Tokyo’s Nikkei 225, however, was up 2.1% at 18,147.42 after losing 4.6% the previous session.
Hong Kong’s Hang Seng, which also lost 4.6% on Monday, gained 1.3% to 21,429.17.
Sydney’s S&P ASX 200 advanced 1.4% to 5,073.20 and Seoul’s Kospi was steady at 1,829.06 after shedding 3% the previous day.
China’s fall was the latest in a series of jarring declines that have defied multibillion-dollar government efforts to stem a slide in prices following an explosive market boom.
Monday’s 8.5% loss for the Shanghai index triggered a global selloff.
On Wall Street, the Dow Jones industrial average lost 3.6%. The Standard & Poor’s 500 fell 3.9%, putting it in correction territory, the term for a drop of at least 10% from a recent peak.
In Europe, Germany’s DAX index fell 4.7%, France’s CAC-40 slid 5.4% and Britain’s FTSE 100 lost 4.7%.
“There was no clear catalyst for the global stock meltdown. The lack of clarity makes it difficult to assess what is needed to stem the rout,” said Bernard Aw of IG Markets in a report.
“A coordinated policy response is critical, and much of this needs to come from Asian economies,” Mr Aw said. “A spate of better economic news may help to allay concerns that global growth is not deteriorating. Certainly, improvements in the Chinese economy will be welcomed.”
China’s declines reflecting the cooling of a market boom that was driven by official policy and cheerleading from the government press, rather than by economic fundamentals.
The Shanghai index rose 150% beginning late last year even as the world’s second-largest economy was cooling, leaving little to support higher prices once investor enthusiasm faltered.
At Monday’s close, the Shanghai index was down 38% from its June 12 peak and just under 1% from its closing on December 31.
That meant the latest declines have wiped out this year’s gains.
