China stocks plunge more than 8 percent, their biggest one-day drop in more than eight years, as a government-triggered rebound peters out amid profit-taking, concerns over economic health and fears of an end to Beijing’s inclination toward looser monetary policies.
SHANGHAI, CHINA (JULY 27, 2015) (REUTERS) – Chinese shares tumbled more than 8 percent on Monday (July 27) as an unprecedented government rescue effort to prop up valuations abruptly ran out of steam, throwing the viability of Beijing’s plan to stave off a deeper crash into doubt.
Major indexes suffered their largest one-day drop since 2007, shattering three weeks of relative calm in China’s volatile stock markets since Beijing unleashed a barrage of support measures to arrest a slump that had started in mid-June.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen plunged 8.6 percent, to 3,818.73 points, while the Shanghai Composite Index lost 8.5 percent, to 3,725.56 points, crossing below 4,000 points.
Stocks fell across the board on Monday, with 2,247 companies falling, leaving only 77 gainers.
All traded index futures contracts also fell by their maximum 10 percent limit, with the exception of a few tracking the large cap SSE50 index, which declined around 9 percent.
Analysts struggled to explain the severity of the sell-off, which accelerated sharply in the afternoon session, long after investors had had time to digest the latest economic releases.
But some Chinese stock investors remain optimistic about the markets.
“(The markets) dropped a lot not too long ago, so now (I) have the immunity and was not especially anxious. I think the markets have reached their lows, there is not much space for further decrease, that’s my personal opinion. I think it would rebound back after dropping,” said 35-year-old investor Tan Minghui, who had experienced the recent markets turmoil.
“I feel it is still optimistic at the moment. It should not turn very quickly from a bullish market to a bearish one. I think this year till before December, from what I’ve seen in the media analysis, it would maintain the slow bullish market,” said 28-year-old investor Wang Weidong.
Hong Kong stocks posted their biggest one-day fall in nearly three weeks, hammered by losses on Wall Street and worries over China, as investors braced for a looming increase in U.S. interest rates.
The Hang Seng index fell 3.1 percent, to 24,351.96, while the China Enterprises Index lost 3.8 percent, to 11,230.67 points as investor sentiment was sourced by an afternoon plunge in mainland stocks.