On Monday, China’s stocks tumbled to their lowest. The Shanghai Composite Index lost 8.45% and fell to 3,211.2 points through the key 3,500 point mark. The Hang Seng China Enterprises Index plunged to its lowest in 6 years, which is 6.7%.
A number of the market participants believe that a real disaster is happening, which is impossible to avert. The companies can be forced to close out their positions unless they reduce the percentage of stocks.
The price of 750 stocks of the companies listed in Shanghai Composite, including Сhina Shenhua Energy Co. and China Shipbuilding Industry Co., fell by 10%. The index plummeted by 38% and the market capitalization shrank by $4 trillion.
Relative Strength Index suffered the biggest drop of 15.4 points since October 1987 when the stock market collapsed.
