China Stocks Dive, but Other Equity Markets Hold Steady

Photo of author

By Jacob Maslow

Chinese stocks nosedived 5% on Friday due to industrial sector and regulatory worries, but other major equity markets were unaffected by the declines.

The CSI300 and the Shanghai composite index saw their largest one-day drop in over three months amid signs that China’s securities regulator was cracking down on leveraged buying. Large industrial firms in China also posted a 4.6% decline in profit.

Wall Street opened slightly lower on abbreviated trading day, with markets to close at 1 PM ET. Leading the decliners was Walt Disney Co. (DIS) after the company stated that its ESPN subscriber base dropped 3%.

The Dow Jones industrial average declined 27.6 points (0.16%) to reach 17,785.53. The S&P 500 was also down 0.2% (0.32 points) to 2,088.55. The NASDAQ composite, on the other hand, was up 4.85 points to 5,120.99.

Europe’s markets were slightly weaker. The FTSE 100 declined to 0.3%, and Germany’s DAX and France’s CAC40 were down 0.2% each. The FTSEurofirst 300 slipped 0.1%.

The slump in China’s stocks brought its ongoing rally to an end. Stocks rebounded 25% since late August. The decline also contributed to a decline in the MSCI’s broadest index of shares in the Asia-Pacific region.

In addition, China’s yuan dropped to 6.4510, a two-month low.

Images Courtesy of DepositPhotos