Chinese Stocks Fall Again After ‘Black Monday’

Chinese stocks have dropped again following a dramatic day that saw billions wiped off markets around Europe and the world.Major Chinese stock indexes tumbled more than 6% in early trading, hitting their lowest levels in eight months, following their 8.5% plunge on Monday.

Chinese Stocks Fall Again

The CSI300 index of the largest listed companies in Shanghai and Shenzhen finished the morning session down 3.9%, while the Shanghai Composite Index fell 4.3%.

Despite this, markets elsewhere in Asia have bounced back.

Japan’s Nikkei reversed early losses, rising 0.5% to 18,620.89.

Hong Kong’s Hang Seng added 1.1% to 21,489.11, while South Korean and Australian stocks also gained.

European equity markets look set to follow those major Asian stock markets this morning with the FTSE 100 expected to open 0.5% – or 31 points higher.

After a year of gains, Chinese markets have been hit by increasing signs that economic growth is faltering.

The People’s Bank of China is under pressure to announce a new round of quantitative easing to boost money supply in an economy suffering weaker demand across all sectors.

The Chinese authorities have intervened numerous times to try to stop speculators selling vulnerable assets.

The most recent move allowed the state pension fund to invest up to 30% of its assets in Chinese stocks.

Since its peak on 12 June, the Shanghai market has lost nearly 40% or around $5.5tn (£3.5tn) of value.

To put this into perspective, total UK GDP output for 2014 was £1.84tn.

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