China’s stocks slump on policy concerns

Uncertainty of Beijing's monetary policy sends Chinese stocks tumbling more than 8 percent on Friday

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

China’s $8.8 trillion stock market plunged on Friday as investors dumped shares on margin trading and increasing ambiguity over policy direction.

The Shanghai Composite Index ended the day down 7.55 percent to 4,192 points.

China CSI300 stock index futures for July closed the session 7.9 percent lower, to 4,335 points.

After a careful analysis of the market pulse analysts say that any greater fall "will send ripples throughout Asian markets.”

According to a report released on Friday, Morgan Stanley has advised clients to not be mislead by the Shanghai Composite’s June 12 high of 5178.19, while a fall of around 30 percent is anticipated till mid 2016, cites Bloomberg.

Despite Beijing’s economic slowdown, China's benchmark stock index has more than doubled over the past year, surpassing major global indexes. 

Beijing’s longest ever bull market was curbed by rapidly-expanding marginal financing, quantitative easing and hopes of economic restructuring however, experts believe the last two factors are now questionable.   

TRTWorld and agencies