Judul : China’s record era of market calm shatters in world’s worst drop
link : China’s record era of market calm shatters in world’s worst drop
China’s record era of market calm shatters in world’s worst drop
But most analysts are still sanguine, with the consensus estimate holding steady at 6.5% growth for 2018.
Benchmark indexes for the world’s second- and fourth-largest stock markets have fallen faster than any of their major peers since the global rout began late last month. With the losses deepening on Friday to more than 12%, both markets were poised to snap their longest-ever streaks without a 10% correction.
The sudden tumble, China’s worst since its 2015 market collapse, has shocked many investors who had grown accustomed to the steadying effect of government intervention over the past two years. But after guiding the Shanghai Composite Index to its calmest bull market in history, authorities are now displaying a higher threshold for pain as they seek to snuff out moral hazard and contain risk in the nation’s US$16 trillion shadow-financing system.
The big question is whether stocks are now signalling trouble ahead for the world’s second-largest economy.
Most analysts are still sanguine, with the consensus estimate holding steady at 6.5% growth for 2018. Optimists also point to the corporate bond market’s relative resilience over the past two weeks and a yuan that still trades near its strongest in two years against the dollar, despite losing some ground in recent days. Investors aren’t yet showing signs of 2015-style panic.
Still, market declines in China have a habit of snowballing. Many observers are bracing for more volatility as liquidity conditions tighten before the Chinese New Year break that starts next week.
On average, declines of 10% or more in the Shanghai Composite have lasted two months before a reversal of the same magnitude.
“We are still in the depth of market volatility as sentiment was hurt by the double whammy of US market turmoil and deleveraging efforts at home,” said Wu Kan, a Shanghai-based fund manager at Shanshan Finance Co.
“Risk appetite has dropped sharply and I don’t think the situation will get any better before the Chinese New Year holiday.”
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Sumber China’s record era of market calm shatters in world’s worst drop