Today is the “Black Monday” for China as the stock market dropped down to the biggest in eight years. Jitters of it have been spread throughout Asia and effects have also been seen in the rest of the world.
Wider sell-off has been witnessed in the emerging markets and it was a three-year low for Asian shares, spreading nervousness to as far as the Wall Street, which already saw sharp falls last week.
Investors are sure to ask tons of questions as trading in stocks is a confidence game. When one loses confidence, pressing the sell button is the simplest and easiest option.
On Monday trading on tons of shares on Shanghai’s main share index was suspended. Since June this year there has been 40 percent drop in the Composite Index. In 2014 it rose up more than 140 percent.
For the Nikkei-225 index the drop was biggest in over two years. It sank 4.6 percent and this is a six-month low.
The MSCI index of Asia Pacific shares outside Japan too saw a southward graph today and declined 5.1 percent, a three-year low.
Shinsei Bank in Tokyo head of research Takako Masai said things seems turning similar to the 1990s Asian financial crisis.
Meanwhile, China announced this weekend the pension funds can buy shares, but still confidence was not restored among the investors.
State news agency Xinhua described today as “Black Monday.”
On Friday the Chinese market dropped 4.2 percent. A sense of panic was generated across investors.