Shanghai stock prices have fallen through what analysts usually describe as a psychological level for the want of a more meaningful term. The Shanghai Composite Index was down 50% at one point today from its all-time high last October of 6092.06. Investors are being rattled by inflation in China, close to an 11-year high, and the housing-led credit crunch in the U.S., close to an all-time disaster.
When it set its record the Shanghai Composite had risen almost sixfold over the previous two years. Bloomberg calculates that China’s stock market peaked in value on Jan. 14 at $4.8 trillion and had lost $1.9 trillion through yesterday, equivalent — in another of theose meaningless but irresistible statistics — to the value of Canada and Germany’s stock markets.
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