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Chinese Stock Trading Suffers Amid Faltering Investor Confidence
2024-08-13 05:50:08
China
Markets
Stocks

Chinese Stock Trading Suffers Amid Faltering Investor Confidence

Image used under license from Shutterstock.com (WDgraph)

China's stock market faces a 4-year low in trading volume, indicating waning investor trust. The Shanghai and Shenzhen bourses witness a significant drop to 496 billion yuan, marking the lowest turnover compared to market capitalization since 2019. Issues like a housing crisis and a bond rally further undermine confidence.

Regulators express concern over the soaring demand for government bonds, while the market heads towards a fourth consecutive year of losses. Meanwhile, Chinese authorities intervene in the bond market to mitigate risks, impacting rural banks in Jiangxi province.

Hong Kong stocks lag behind regional recovery, with Meituan and Li Auto leading losses.

Related news on that topic:

PBOC's Caution Sparks Sell-Off in Chinese Bond Market

Chinese 10-year bond yields climb amidst PBOC's concerns over interest-rate risks, driven by haven asset demand and increased financial investments. The central bank's warnings prompt cautious investor sentiment, with brokerages scaling back bond trading activities to avoid potential market bubbles. Analysts advise vigilance against duration risk and anticipate higher yields due to expected monetary easing and increased bond issuance. The ongoing battle between the PBOC and bullish investors reflects a delicate balance in addressing China's economic challenges and deflationary pressures.

Stocks Tumble Amid Disappointing Earnings and Economic Concerns

Stocks experienced a sharp decline after a strong open, as tech stocks faltered and companies such as Super Micro Computer, Dell, Nvidia, and Intel reported disappointing earnings. Disney also disappointed with its earnings. Biotech stocks, including Amgen and the Nasdaq Biotechnology Index, struggled, while bond yields rose, negatively impacting the iShares 20+ Year Treasury Bond ETF. Concerns about the economy, including the upcoming weekly jobless claims report and uncertainty about the future, weighed on sentiment. The consensus estimate for jobless claims is higher than expected, raising further worries. Market recovery from Monday's slump was also challenging. The key question now is whether the market will retest Monday's low for the S&P 500 before a real recovery can begin. In addition to these concerns, yen-carry-trade unwinding, a potential rate cut, and geopolitical factors have added volatility to the markets. The stock market rally attempt on Tuesday provided some relief, but a follow-through day is still needed to confirm a sustained recovery.

Read 3 more recent news on this topic

The press radar on this topic:

Yahoo!
13. August 2024 um 00:41

China Goes to New Extremes in Crackdown on Bond-Market Frenzy

Finance
Politics
Economy
Chinese authorities are aggressively intervening in the world's third-largest government bond market to curb speculation and financial risks. They have ordered rural banks in Jiangxi province to renege on recent bond purchases, causing the benchmark 10-year yield to rise from record lows. This follows concerns about banks' exposure to interest-rate risk, similar to the collapse of Silicon Valley Bank. Analysts at Mizuho Securities Asia, Citigroup, and Pictet Asset Management weigh in, noting the..
Companies - South China Morning Post
13. August 2024 um 02:49

Hong Kong stocks left out of regional recovery as Meituan, Li Auto pace losses | South China Morning Post

Finance
Technology
Environment
Hong Kong's Hang Seng Index lost 0.2% to 17,083.33 as of 10:30am local time, snapping 4-day gain. Tech Index unchanged, Shanghai Composite fell 0.1%. Tencent rallied on earnings bets; CNOOC, PetroChina, Sinopec rose on higher oil prices. Li Auto, BYD, Meituan, NetEase declined. County Garden Services tumbled 3.8% on 37% profit drop. Major Asian markets advanced: Japan's Nikkei 225 +2.4%, Australia's S&P/ASX 200 +0.1%, South Korea's Kospi unchanged. Key to sustained inflow lies in China's econo..
Yahoo Finance
13. August 2024 um 03:48

Chinese Stock Trading Plummets in New Sign of Waning Confidence

Finance
Economy
China's world-leading stock market sees trading volume plunge to 4-year low, with combined turnover on Shanghai and Shenzhen bourses dropping to 496 billion yuan, lowest vs. market capitalization since late 2019; housing crisis and bond rally signal waning investor confidence; regulators alarmed by surging demand for government bonds; market on track for 4th consecutive year of losses.
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