Chinese stocks fall the most in 27 years

Asian stock markets fell sharply after China's top economic planning body failed to announce further measures to improve slowing growth.

On Tuesday (October 8), China's National Development and Reform Commission (NDRC) held a press conference where officials are expected to unveil specific policies to complement the stimulus measures announced last month.

On Wednesday (October 9), the Shanghai stock exchange lost 6.6%, while the Shenzhen composite index fell 8.2%. Photo: Alex Plavevski/EPA

However, the expected policies were not released. Instead, NDRC officials mainly summarized September's announcements and commented on the overall economic situation.

On Wednesday (Oct. 9), the Shenzhen Composite Index fell 8.2%, its biggest drop since May 1997, while the Shanghai Stock Exchange lost 6.6% and the benchmark CSI 300 Index fell 7.1% after the Golden Week holiday. Hong Kong's Hang Seng Index fell 1.4%.

Still, the market is higher than it was a month ago, before the central bank and the Politburo proposed a “step-up policy package” to stabilize China’s weakening economy. The CSI 300 index is 7% higher than a year ago.

After the stock market plunged, the State Council Information Office said it would hold a press conference on Saturday attended by Finance Minister Lan Fo'an.

The theme of the press conference was "strengthening counter-cyclical fiscal policy adjustment to promote high-quality economic development".

Some fiscal measures, such as issuing government bonds, require approval from China's legislature, the National People's Congress.

The Congress Standing Committee will meet in late October, an event that will be closely watched by analysts and investors for signs of further stimulus measures.

Richard Hunter, head of markets at trading platform Interactive Investor, described the stock market's decline on Wednesday (October 9) as a reflection of "investor frustration".

Meanwhile, Alvin Tan, head of Asia FX strategy at RBC Capital Markets, told Reuters that investors had been expecting stimulus measures worth 2 trillion to 3 trillion yuan (£200 billion to £300 billion) to be announced this month.

The positive sentiment “will quickly change if we don’t get some package that is at least equivalent” to that range, Mr Tan said.

China's economy is struggling to recover from the Covid-19 pandemic and is beset by a host of structural and geopolitical problems, including a struggling property market.

According to official statistics, the urban youth unemployment rate reached 18.8 percent in August, while the urban unemployment rate across all age groups was 5.3 percent.

There are growing concerns that China will miss its own 5% annual growth target, a modest target by the country's historical standards.

Meanwhile, the government is engaged in a tit-for-tat trade war with the EU, one of China's most important trading partners.

This week, Beijing announced tariffs on imported spirits from Europe and said it was considering imposing duties on imported gasoline-powered cars.

The tariffs come after EU leaders voted to impose tariffs on Chinese electric vehicle imports.

An Nhien (According to The Guardian)

Source: https://www.congluan.vn/co-phieu-trung-quoc-giam-manh-nhat-trong-27-nam-post316110.html