Daily Management Review

Chinese stock market collapses on Monday by more than 3.7%


10/08/2018


Stock markets in the Asia-Pacific region fell on the first working day of the week following the fall of the Chinese market.



The Chinese indices Shanghai Composite and Shenzhen Composite collapsed in a day by 3.72% and 3.83%. Trading on the sites resumed on Monday after a week break due to holidays. The past week was characterized mainly by negative dynamics in Asian stock markets, and the PRC markets won back this trend on Monday, experts say.

On Sunday, the People’s Bank of China decided to reduce the reserve requirements for banks for the fourth time this year. The reserve ratio will be reduced by 1 percentage point from October 15. These measures are expected to free up liquidity in the amount of about 1.2 trillion yuan ($ 174.7 billion), of which 450 billion yuan will be used to pay off debt under the medium-term lending program.

China's foreign exchange reserves, the largest in the world, declined in September by 0.7%, or $ 22.7 billion, compared with the previous month - to $ 3 trillion 87.03 billion. Experts on average forecast a decline to $ 3.105 trillion, according to Trading Economics. September volume is minimal since July last year.

As it became known on Monday, the index of business activity in the service sector in China, calculated by Caixin Media and Markit, rose to 53.1 points in September in three months, up from 51.5 points in August and 51.4 points a year ago. Consolidated PMI increased to 52.1 points from 52 points in August and 50.6 points in September last year. The value of indicators above 50 points indicates an increase in business activity.

Hong Kong's Hang Seng dropped 1.39%, ending in the fifth session in a row.

The rate of securities of the Internet giant Tencent Holdings Ltd. decreased by 2%, developer Country Garden Holdings - by 6.7%.

By the end of the day, even shares of representatives of the financial sector, which showed an increase in quotations at the start of trading, fell in price. In particular, the securities of insurers AIA (by 0.3%) and China Life Insurance (by 0.6%), and Bank of China (by 2.7%) fell in price.

The value of the South Korean Kospi index on Monday decreased by 0.6%.

However, the capitalization of one of the world's largest semiconductor manufacturers, Samsung Electronics Co. increased by 0.6%.

source: tradingeconomics.com






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