Chinese Stocks on Verge of Five-Year Low as Recovery Hopes Fade

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Bloomberg News

CSI 300 Index,Economic Recovery,Bearish Sentiment

(Bloomberg) -- Chinese stocks are on the brink of falling to a five-year low seen in February as bearish sentiment grips the market amid a lack of earnings...

-- Chinese stocks are on the brink of falling to a five-year low seen in February as bearish sentiment grips the market amid a lack of earnings and economic recovery.The CSI 300 Index declined as much as 1.2% on Monday, taking its slide from this year’s high in May to more than 13%. A further decline would take the benchmark to levels unseen since early 2019, suggesting years of policy efforts to revive the economy and prop up share prices have proved futile.

The CSI 300 Index rebounded 16% from February through mid-May, as state funds purchased billions of dollars worth of exchange-traded funds and regulators clamped down on short sales and quant trades. Its slide since then is just another example of how policies have failed to address the fundamental ailments that have been hurting sentiment.

The CSI 300 is near levels seen during the February rout, when exit orders at structured products like snowball derivatives and quantitative funds exacerbated a selloff, and investors rotated into Indian stocks in a major shift in EM portfolios.

 

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