Not since November 2014 has the Shanghai Composite Thesaurus, the primary benchmark of China’s stock market, shown such vulnerability. Late last week, the index gapped down below its key 2,650 assist level and has continued to drift mostly lower since, establishing closely a four-year low in the process.
A combination of rising global interest rates, demean economic growth projections for China and growing U.S.-China trade challenges has contributed to weighing down Chinese stocks in recent weeks and months.
Since the Brobdingnagian rise in the Shanghai Composite in 2015 to its June 2015 peak at 5,178, the forefinger has plunged by just over 50% to 2,561 as of Wednesday’s close. This year by oneself, the Chinese equities benchmark has dropped by more than 22% year to old-fashioned, plummeting well below its 200-day moving average.
Prone that China’s growth prospects have declined substantially and there appears to be no end in notice for U.S.-China trade conflicts, the breakdown and extended bear market in China provides is likely poised to continue.
Source: TradingView