The sharpest fall in the index since 25 February 2016
And it’s the weakest daily close since 25 November 2014. Meanwhile, the CSI 300 index also falls by 4.8% at the close to its lowest level since 27 June 2016. To say that it has been a bad day for Chinese stocks at this point is an understatement. Given the context of what has already been a terrible year, today is very much an insult to injury – and a big one.
The significance of the close here also cannot be understated. For the Shanghai Composite, the technicals show that price has now cracked the support seen from February and March 2016. At this rate, we could be eyeing towards 2,000 for the next key support level in the index unless Chinese authorities step in to prevent that.
Of note, there were more than 800 companies which traded limit down (>10% loss) today in the exchange. That’s almost 25% of all the companies trading.