Ways2Capital Reviews : China’s Stock Index Falls Below 3,000 For First Time Since 2016

China’s benchmark equity gauge fell below 3,000 for the first time since September 2016, as a trade dispute with the U.S. intensified.

The Shanghai Composite Index slid 3.1%, the most since March 23, after U.S. President Donald Trump threatened to slap tariffs on another $200 billion in Chinese imports. Beijing said it would take “strong” countermeasures if new levies are issued. Shares also tumbled in Shenzhen and Hong Kong, and the yuan fell to its weakest against the greenback since mid- January.

The latest threat from Trump comes before the first wave of 25% import levies takes effect on July 6. The tariffs target Chinese President Xi Jinping’s Made in China 2025 plan that seeks to develop sophisticated manufacturing capabilities.

The Shanghai benchmark’s 3,000 level has been seen as a red line that would invite government intervention. Some institutional investors are “proactively” making plans to buy A shares and will buy more if the gauge falls under 3,000, the China Securities Journal reported Tuesday, without saying where it got the information or identifying the institutions.

“Margin calls facing some listed companies’ shareholders and concerns over big-cap IPOs also added to bearish sentiment,” Central China Securities’ Zhang said.

Below are some of the Chinese products in Washington’s cross-hairs, according to the U.S. list released last week.

Markets in mainland China and Hong Kong were closed Monday for a holiday.

Source: Bloomberg

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About Bhoomi Desai