China’s Shanghai Composite Index and 2,000 other stocks crashed, adding to the growing concerns over the country’s stock market.
From last years lowest 1,991 points to this year’s highest 5,000 points, China’s market has gone through a hell of a ride.
Since last Friday, the Shanghai Composite Index dropped 13.32 percent, while the Shenzhen Composite Index dropped 13.11 percent, the largest declines since 2008.
Today, according to Sina, the Shanghai Composite Index slumped 7.30 percent to 4,197.11 points and the Shenzhen Composite Index plummeted 8.37 percent to 14,378.25 points.
Values on Chinese shares have more than doubled over the past year due to margin traders flushing the markets with borrowed money.
Jonathan Garner, a Morgan Stanley strategist, predicted last Friday that in the next 12 months, the market will continue to plunge for another 20 to 30 percent.
As an effort to reduce losses, China’s central bank added liquidity into their banking system on Thursday and stopped all market operations for several weeks. China’s State Administration of Film, Radio and Television (SARFT) has also requested all radio and television stations to cut back on reports on the market to prevent false reports from triggering further surges or falls.
[Image via People.China]
By Sharon Choi