On-going volatility on the Chinese stock markets

BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/35

​On Monday (Aug. 24), Shanghai share prices fell 8.5 %, and continued to fall the next days. On Wednesday (Aug. 26) Shanghai stocks were still down about 27 % from the start of last week, but the market has since recovered some 5 %. Monetary easing has somewhat calmed the markets, but officials have refrained from market bailouts similar to what was done during the July plunge in share prices. Direct interventions in equity markets are poorly suited to the long-term goals of market liberalisation and modernisation.

Share prices on other emerging markets have also had a volatile two weeks. On Wednesday, emerging stock markets were still down on average about 7 % from the start of last week. In Hong Kong share prices also fell sharply, down 11 % y-o-y on Wednesday from the beginning of last week.

Stock trends in China and other emerging markets
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Source: Bloomberg

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