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| Chinese stock market has lost £1.5 trillion in the last three weeks | Chinese stock market has lost £1.5 trillion in the last three weeks |
| (about 3 hours later) | |
| The Chinese stock market has endured a torrid three weeks in which it has lost value equivalent to £1.5 trillion — that's 10 times the size of Greece's annual GDP. | |
| The Shanghai Composite, an index of all stocks traded on the Chinese stock exchange, has fallen 30 per cent since its peak on June 12 following a record-breaking eight-month growth period. It's been the market's worst three weeks since 1992. | The Shanghai Composite, an index of all stocks traded on the Chinese stock exchange, has fallen 30 per cent since its peak on June 12 following a record-breaking eight-month growth period. It's been the market's worst three weeks since 1992. |
| In its third straight 'Black Friday,' the market crashed by 3.25 per cent, falling below 4,000 for the first time since April. | In its third straight 'Black Friday,' the market crashed by 3.25 per cent, falling below 4,000 for the first time since April. |
| China's stocks have fallen massively this month (Bloomberg) The fall has been so precipitous that China's financial regulator has said it will investigate suspected market manipulation. | China's stocks have fallen massively this month (Bloomberg) The fall has been so precipitous that China's financial regulator has said it will investigate suspected market manipulation. |
| The China Securities Regulatory Commission (CSRC) will look into abnormal market movements from stock market and futures exchanges — including allegations that some overseas investors are driving prices down by short-selling Chinese stocks. | The China Securities Regulatory Commission (CSRC) will look into abnormal market movements from stock market and futures exchanges — including allegations that some overseas investors are driving prices down by short-selling Chinese stocks. |
| According to Reuters, the China Financial Futures Exchange (CFFEX) has already suspended 19 accounts from short-selling for a month. | According to Reuters, the China Financial Futures Exchange (CFFEX) has already suspended 19 accounts from short-selling for a month. |
| Biggest 3-week rout on the Shanghai Composite since 1992 pic.twitter.com/CD8ti8Qfs2 | Biggest 3-week rout on the Shanghai Composite since 1992 pic.twitter.com/CD8ti8Qfs2 |
| But it looks more likely that Chinese stocks had simply been overvalued, having inflated 150 per cent in just one year. | But it looks more likely that Chinese stocks had simply been overvalued, having inflated 150 per cent in just one year. |
| Last week Morgan Stanley said it expects Shanghai's benchmark index to fall by a further 2-30 per cent over the next year, with one senior analyst claiming this to be end of a cycle of growth. | Last week Morgan Stanley said it expects Shanghai's benchmark index to fall by a further 2-30 per cent over the next year, with one senior analyst claiming this to be end of a cycle of growth. |
| To its credit, the state-run Global Times newspaper wrote in a recent editorial that manipulation by foreign investors was not to blame: "Foreign capital has only a small part of the Chinese stock market. | To its credit, the state-run Global Times newspaper wrote in a recent editorial that manipulation by foreign investors was not to blame: "Foreign capital has only a small part of the Chinese stock market. |
| "Large-scale short selling by foreign investors in the Chinese stock market has not appeared and is an unlikely scenario." | "Large-scale short selling by foreign investors in the Chinese stock market has not appeared and is an unlikely scenario." |
| In response to the drop in the Shanghai Composite, the government has cut the cost of borrowing and eased margin lending rules, encouraging brokerages to lend money. | In response to the drop in the Shanghai Composite, the government has cut the cost of borrowing and eased margin lending rules, encouraging brokerages to lend money. |