No reprieve for Chinese stocks as Shanghai Composite enters bear market
The Shanghai Composite has fallen by more than 20% from the highs this year
Despite the Nikkei and Hang Seng (now flat) paring losses on the day, mainland Chinese stocks continue to suffer a beating as the Shanghai Composite fell 0.52% today. From the highs posted in January this year, the index has fallen by 20.7% at the close today and officially enters a bear market - by definition.
The close of trading today was the lowest since June 2016.
Given that the PBOC moved forth with RRR cuts over the weekend to flood the market with liquidity (no doubt that it will only take effect in July but still), it really makes you wonder how much worse the rout here would have been if not for that.
The PBOC's actions by right should have provided some base or support for Chinese stocks but so far it has done little to stem the bleeding. At this point, you really have to wonder what else is going to help prop up the market if even a massive stimulus/liquidity boost is not going to do the trick.
If Chinese authorities don't step in with further interventions in the near-term, investors are set for further pain down the road.