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China at risk of losing title of world's number two stock market
[HONG KONG] China's equity market is only one bad day from losing a title it's held for almost four years.
Following Tuesday's US$406 billion wipeout, Chinese stocks have lost more than US$1.6 trillion in market cap since a peak in January. It would only take another drop of a similar magnitude to make Chinese stocks less valuable than those in Japan, which typically benefits from having a currency that's often seen as a haven asset in times of market stress.
China has been home to the world's second-largest equity market since it overtook its Asian neighbour at the end of 2014, according to data compiled by Bloomberg. The country's stocks failed to rebound on Wednesday despite efforts by the government to soothe nerves rattled by the threat of additional US tariffs.
The benchmark Shanghai Composite Index fell another 0.6 per cent by the midday break, after almost 80 per cent of the stocks on the gauge hit fresh four-week lows on Tuesday.