EIGHT is an auspicious number in China, because in some dialects it sounds like the word for prosperity. Negative-eight, it seems, means just the opposite. After two consecutive days of 8% losses—the Chinese stockmarket’s biggest two-day plunge in nearly two decades—the fortunes of those punters who are still holding shares are decidedly smaller than they were at the end of last week. Big falls have become the norm for Chinese shares over the past two months, but Tuesday’s tumble was especially notable.
The Shanghai Composite Index, the country’s main index, has now broken below the 3,000 level. Shares may well have quite a bit farther to fall, for they are still up by a third over the past year. But to be back into the range of the 2,000s, the level at which they had languished for the previous half-decade, is to mark a remarkably rapid crash back to earth. China’s stockmarket is, of course, hardly the first to experience a violent, destabilising swing from euphoria to despair. But few others have condensed the wild ride from trough to peak to trough into a tidy 12-month (more or less) package.
What was most striking...Continue reading
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