Insta
US Trade War Impact: Chinese Stock Market Plummets To Its Lowest Since 2014
Representative Image. (VCG/VCG via Getty Images)
Shanghai Composite Index again closed at a record low since 2014 indicating the continuing sink the Chinese stock market is currently facing. The gauge fell by 1.1 per cent to 2,651 points, which is lower than its January 2016 bottom.
The numbers indicate that China hasn’t recovered from the 2015-16 crash. Many companies are reportedly finding it difficult to cut off from equity financing, leading to the creation of more debt. It is headed for a straight fourth-quarter loss, one of the most protracted declines since 2008.
The increase in Chinese equities contrasts with gains for global stock, reports Bloomberg. The MSCI World Index is up by 21 per cent since November 2014.
Tensions over trade with the US is expressed as one of the primary reasons for investor concern. The Chinese government has been planning to decline talks with the US since President Trump has told aides to go ahead with extra tariffs on Chinese products.
China’s yuan has fallen by almost 7 per cent since March, allegedly because the Chinese were trying to counter the impose of US tariffs.
Since there has been an increase in Chinese equities, it is likely that this will increase the appeal of other assets such as property, which will undermine the government’s efforts to display the stock market as a base for company funding.
Introducing ElectionsHQ + 50 Ground Reports Project
The 2024 elections might seem easy to guess, but there are some important questions that shouldn't be missed.
Do freebies still sway voters? Do people prioritise infrastructure when voting? How will Punjab vote?
The answers to these questions provide great insights into where we, as a country, are headed in the years to come.
Swarajya is starting a project with an aim to do 50 solid ground stories and a smart commentary service on WhatsApp, a one-of-a-kind. We'd love your support during this election season.
Click below to contribute.
Latest
