The Shanghai Composite and Hang Seng fall to where they’d first been in 2007 during the run-up of the bubble.
By Wolf Richter for WOLF STREET.
The Shanghai Composite Index plunged 5.1% to 2,928 on Monday, the biggest one-day drop since February 2020, during the Wuhan crisis. The index is now down 20% year-to-date and down 14% from a year ago. And for folks promoting buy-and-hold: The index has now returned to a level it had first reached in February 2007 during the run-up of the ridiculous stock market bubble just before the Beijing Olympics.
Also gone is the hype-and-hoopla bump that Chinese stocks got in mid-March when Vice Premier Liu He, in order to stem the slide then in progress, came out with promises of market-friendly measures.
The CSI 300 index, which tracks the biggest blue-chip stocks trading in Shanghai and Shenzhen, dropped 4.9% on Monday, to 3,933, is down 23% year-to-date, and is down 25% from a year ago.
Hong Kong’s Hang Seng Index, where many Chinese companies are listed, plunged 3.7% on Monday and is down 31% year-over-year. At 19,869, the index has regressed to a level first seen in January 2007.
The offshore yuan, after dropping 2% last week against the dollar, fell as much as 1.3% on Monday to 6.60 per dollar, the lowest since November 2020.
When it hit that level, the People’s Bank of China came out to support the currency and said it would cut the foreign-exchange reserve requirement ratio for banks next month to 8%, from 9%,…
