The steepest decline in the Asian stocks on Monday August 24 was named "Black Monday". The Asian market faced the record slump over the past several years. The Shanghai Composite index dropped by 8.45% to 3,211.2 points that is below the key level of 3,500 points. The Hang Seng China Enterprises declined by 6.7% to the lowest reading since 2009. Taiwan’s Taiex also lost 7.5%.
Immediate government intervention and support did not lead to the desired results. Investors are still concerned over the growth in the world’s second largest economy.
China lets its main state pension fund invest in the stock market for the first time. However, this action only caused more anxiety and the previous measures, including lower reserve ratio, did not meet the expectations. Thus, the stock market panic led to the rout as investors lost faith in the ability of the world’s second biggest economy to keep on growing at a healthy rate and now they are trying to save the invested funds. The pension fund’s investment is the latest attempt to arrest the slide in the country's stock market. However, optimists expect that the situation will stabilize.
