Stocks on the Chinese mainland plummeted sharply this morning, with the Shanghai Composite Index down by 5.19 percent since opening and the Shenzhen Stock Exchange down 5.32 percent and continuing to drop as of 3pm today.
China’s CSI 300 Index, which gathers the top 300 stocks on the Shanghai and Shenzhen stock markets was also down by 4.64 percent at 3pm.
Amongst the Chinese companies experiencing sharp falls are internet giant Tencent, which fell by as much as 7.5 percent today on the Hong Kong Hang Seng Index, the largest decline for the company since October 2011.
The Hang Seng Index is likewise down 3.89 percent as of 2pm today, while Taiwan’s Taiex index has suffered the largest decline amongst Asian indexes today, hovering just above 6.2 percent since 11.30am.
Chinese stocks also fell severely on Monday, earlier this week. That previous fall in stock prices has largely been attributed to the consequences of the ongoing trade war with The United States.
This current fall in prices seems to be a knock-on effect of a similar dip in Wall Street stock indexes which suffered their worst fall in eight months last night, according to an article published by The Financial Times this morning.
Traders have been unable to locate a suitable explanation for the falling prices. Some have pointed to the continuing trade war between China and The United States, according to CNBC, while others have said that the fall is a market correction.
In response to falling US index numbers, and in response to the US Federal Reserve continuing to raise short-term interest rates, US President Donald Trump said, “The Fed is making a mistake. They’re so tight. I think Fed has gone crazy.”
This is another break with the tradition of the US presidential office from Trump. Former presidents have rarely criticised the Federal Reserve in the past in order to safeguard economic stability.
The fall in the price of stocks comes just days after Bloomberg reported that US Treasury Secretary Steven Mnuchin was concerned about the depreciating price of the Renminbi. Much ink has been spilled in the interim about whether the United States would name China a currency manipulator as their trade war continues to rage on.
[Cover image via Wikimedia]