January 5, 2016

Chart of the Day: Disaster On The Shanghai Composite

   January 5, 2016

Chart of the Day: Disaster On The Shanghai Composite

The CSI 300 tumbled 7% on its first day of trading in 2016. This was triggered by a failure in the circuit breakers which halted trading for rest of the day. As you can see in the chart below, the Chinese market has been extremely volatile for the last six months and liquidity is quite poor. The government is also known to actively intervene in the stock market. Hence, one should not be over reliant on looking at just the move in the Shanghai Composite to get a pulse of the economic situation in China.

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