Black Friday for two consecutive weeks in China

China’s Shanghai stock market plunged by over 7 % on Friday, continuing the Black Friday for two consecutive weeks. Concerns are growing as Chinese stock markets, which have created a controversy over bubble, may enter a correction stage. On the same day, Shanghai Composite Index fell by 334.91 (7.4 %) to 4,192 at the close.

As People’s Bank of China, the central bank of the nation, has started removing regulations on loan-deposit ratios instead of lowering the benchmark interest rate that the market expected on the previous day, concerns arose that the Chinese government‘s will to revive the economy has been weakened. Another unfavorable factor was that the Chinese financial authority has received application for listing from 28 businesses. Shanghai Composite Index dropped by over 6 % on June 19.

imsoo@donga.com