On July 20, China’s stock indices sank again due to high volatility on the domestic equity market.
By 8:18 ET, Shanghai Composite dropped 0.3%. Moreover, the index was trading in the erratic manner reversing a dynamic more than 10 times. Shanghai Composite managed to secure its position at 4,000 points, but then it went on declining. The index met the challenge of the equity market crash on July 8. Since then, Shanghai Composite has regained 13%.
The index capitalization shrank on the back of China’s stock market fall. On the whole, almost $4 trillion in value has been erased from companies in the benchmark index. In an effort to stop the steep slide of equities, the Chinese government has intervened in the domestic stock market nearly every day spending 3 trillion yuan or $482 billion. Besides, China’s regulator banned investors with shareholdings of more than 5% in a company from selling shares. Hundreds of Chinese stocks were frozen from trading with 1,287 companies halted mostly at their own request.
The malaise in China stocks is spreading outward. So Hang Seng in Hong Kong and Australia’s S&P/ASX 200 fell 0.3% and 0.2% respectively.
Japan’s stock market was closed on July 20 because of Sea Day, a Japanese national holiday.
