Emerging Markets, Stocks

What’s Going On With China’s Stock Market?

Mark Mobius, the Executive Chairman of Templeton Emerging Markets Group who has over 40 years of experience investing in emerging markets, warned investors back in April, that Chinese stocks had risen too fast after the world’s best stock market rally sent the benchmark gauge to its highest level in seven years.

Mobius also said that he believes that mainland Chinese shares, or A-shares, are unlikely to gain entry into the MSCI Inc. indexes this year, which will limit the demand from international investors.

Financial Post

China’s stocks look to be falling back down to reality.

After an epic rally that saw the Shanghai Composite index climb more than 40% this year and the tech-heavy Shenzhen Composite rise a world-leading 90%, a correction — or maybe worse — looks to be in the works.

Last week both indices lost more than 10%, falling solidly into correction territory. But investors hoping that some of the volatility would ease this week will likely have to do more waiting.

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Tuesday was one of the most volatile trading days for the Shanghai Composite since the financial crisis, with the index falling nearly 5% before making a big 312-point comeback to end the day up 2.2%.

The correction comes at a time when foreign investors have been increasingly moving in to get a piece of the rally. China’s mainland stocks, known as A-shares, were off limits to foreign investors…

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About ETFalpha

Chief ETF Strategist & Co-Founder at EMerging Equity


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