Colossus in free fall!
China’s stock market giant sinks into a relentless bear market after as much as $2.4 trillion evaporates and historic loss records are shattered
What’s happening in the markets?
The Chinese stock market has crossed the red line into an official bear market, dragged down by a perfect storm of macroeconomic factors, technological weakness, and retail panic.
Official plunge of
#CSI300 : The index tracking the 300 largest companies in mainland China fell 20% from its June peak, hitting its lowest level in 15 months.
Astronomical losses in the billions: Since May, the plunge has wiped out $2.4 trillion (¥12 trillion), severely undermining investor confidence.
Historic losing streak: The market has fallen for 10 consecutive weeks, marking the longest losing streak ever recorded for the index.
Causes of the collapse:
Expectations of new government economic stimulus have evaporated.
Weak corporate earnings and a deep slump in domestic consumption.
The contagion from the global sell-off in the artificial intelligence (AI) sector, whose promises of profitability are beginning to be questioned.
The retail volatility factor: Unlike Western markets such as the New York Stock Exchange (NYSE), where institutional investors dominate, retail investors in China drive close to 90% of daily trading volume, making sell-offs much faster, sharper, and more panic-driven.
Insufficient government intervention: Despite reported efforts and interventions by state-backed funds to support prices, selling pressure continues to dominate the trading floor.
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