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China's stock market loses $3 trillion in market capitalisation in last six months

At the current level of 2,548 points, the Shanghai Composite Index is down more than 50% from 5,166 level, it attained in 2015. The index has lost 22.93% since the beginning of this year and fallen 24.41% during the last one year.

twitter-logo BusinessToday.In        Last Updated: October 17, 2018  | 10:41 IST
China's stock market loses $3 trillion in market capitalisation in last six months

The Chinese stock market has lost $3 trillion in the last six months since the beginning of the trade war with the US. The Shanghai Composite Index, the country's benchmark stock index is trading now 50% below its bubble high of 2015.  

At the current level of 2,548 points, the index is down more than 50% from 5,166 level, it attained in 2015. The index has lost 22.93% since the beginning of this year and fallen 24.41% during the last one year.

In comparison, the Sensex has gained 29.20% during the last three years. The Nifty too has risen 28.50% during the same period.

However, from their all-time high level of 38,989 and 11,760 reached on August 29 this year, the indices have lost over 10%.

China's stock markets showed no signs of recovery on Tuesday after a week of declines as investors await more concrete moves by authorities to support the economy.

The drop followed a week of declines that sent the Shanghai Composite to levels not seen since 2014.

While last week's sell-off was inspired by woes on Wall Street, its continuation in A-shares this week shows that Chinese investors have little confidence in their government's willingness to support the market, said a Beijing-based trader.

"The message from the central bank has been very positive," he said. "However, markets are hoping for action, not words, to support enterprises."

The People's Bank of China's 100-basis point cut to banks' reserve requirement ratio (RRR), announced by the central bank on October 7, took effect on Monday, easing pressure on the yuan. But that has done little to restore confidence in equities, said this trader.

"Banks have looser liquidity, but the money is not finding its way to the real economy. The impact on stocks is very small," the trader added.

With inputs from Reuters

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