After a catastrophic Monday that destabilized financial markets around the world, China’s major stock indexes slumped more than 6 percent to 8-month lows in early trade on Tuesday before paring losses.
By 0200 GMT (10 p.m. ET Monday), the CSI300 index was down 4.4 percent at 3,132.26 points, while the Shanghai Composite Index Shanghai composite lost 4.8 percent to 3,057.04 points. Chinese stocks plunged more than 8 percent on Monday in panic selling, with flagship indexes smashing key support levels and posting their biggest one-day percentage losses since the height of the global financial crisis in 2007. “Global investors are cannibalizing each other. Calling it a market disaster is not an overstatement,” said Zhou Lin, an analyst at Huatai Securities. The central bank made a large 150 billion yuan (US$23.43 billion) injection into the interbank market on Tuesday morning via its regular open market operations. Many investors worry the injections are being used as a substitute for the longer-term easing to bank reserve requirement ratios which would free up far more substantial sums of cash for long-term investment.
After a year of heady gains, Chinese markets have been buffeted by increasing signs that economic growth is faltering, and the central government’s efforts to reassure and backstop stock investors have been sunk by a succession of weakening indicators…..
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Image: REUTERS/Bobby Yip