China Stocks Experience Worst Monthly Loss in a Year, Bringing Back the Doom

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Last Updated on July 30, 2022 by Bitfinsider

Chinese equities fell sharply on Friday to bring an awful month to a close. This month saw almost all of the concerns that have terrified investors for much of the previous year reappear.

Traders had to deal with a lot of negative news in July, from indications of a resumption of the tech industry crackdown to an intensification of the crisis enveloping real estate developers and a rebound in Covid-19 cases. Once again, concerns are growing as to whether the market has reached a bottom because there are little indications that the authorities intend to increase their policy support.

The Hang Seng China Enterprises Index of stocks experienced its worst monthly performance in a year on Friday, down 2.8 percent, bringing its loss for the month of July to nearly 10%. After markets were frustrated by the lack of new stimulus at the China’s Politburo meeting, tech and real estate sectors spearheaded the general selloff. In New York on Friday, the Nasdaq Golden Dragon China Index dropped roughly 4%, putting it on pace for its lowest month since March.

A Hang Seng gauge of the industry fell 4.9 percent on Friday, the largest decline in tech equities since early May. As investors evaluated the effects of Jack Ma allegedly relinquishing control of its fintech division, Alibaba Group Holding Ltd. fell. Additionally, there was caution ahead of its earnings the following week, when it is anticipated to disclose a fall in revenue.

Separately, Meituan, a massive food delivery startup, suffered following reports that Hangzhou City’s market regulator had requested a conversation with the business regarding food safety issues and had cautioned against a pricing war. Following a Bloomberg story that its $10 billion automobile project faced regulatory obstacles, smartphone manufacturer Xiaomi saw its stock drop.

The benchmark CSI 300 Index for China also fell, bringing its monthly decrease to almost 7% and ending a two-month surge that defied a slump in global markets.

This month, the country’s antitrust police punished Tencent Holdings Ltd. and Alibaba for improperly disclosing prior transactions. Only a few days later, fresh falls in tech equities were sparked by a report claiming Alibaba officials had been called in by law enforcement in relation to the theft of a sizable police database.

This month saw a worsening of the real estate crisis as more buyers rebelled against making mortgage payments on incomplete homes. The largest builder in China, Country Garden Holdings Co., and Alibaba are among the index’s underperformers this month.

The economic cost of viral restrictions is still weighing on public opinion. The readiness of China’s small and medium-sized manufacturers to hire new workers is almost at an all-time low, adding to the labor market’s difficulties in a country where the economy grew at the slowest rate in the most recent quarter since the coronavirus outbreak hit two years ago.

Even still, some market observers are upbeat following the sudden decline in equities prices.


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Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.


Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.

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