Baku. 15 January. REPORT.AZ/ Chinese shares fell into a bear market for the second time in seven months, wiping out gains from an unprecedented state rescue amid waning confidence in the government’s ability to manage the country’s markets and economy.
Report informs citing Bloomberg, the Shanghai Composite Index sank 3.5 percent to 2,900.97, falling 21 percent from its December high and sinking below its closing low during a $5 trillion rout in August. Friday’s decline was attributed to persistent investor concerns over volatility in the yuan and a report that some banks in Shanghai have halted accepting shares of smaller listed companies as collateral for loans.
The selloff is a setback for President Xi Jinping’s government, which has been intervening to support both stocks and the yuan after the worst start to a year for mainland markets in at least two decades. As policy makers in Beijing fight to prevent a vicious cycle of capital outflows and a weakening currency, the resulting financial-market volatility has heightened concern that the deepest economic slowdown since 1990 will worsen.
Shares “entered a disaster mode at the start of the year and it’s still in that pattern now,” said Wu Kan, a fund manager at JK Life Insurance Co. in Shanghai. “The market has no confidence.”