World News | Chinese Stocks Plunge Further, Facing Worst Week in Years

Beijing [China], February 3 (ANI): Chinese stocks experienced a tumultuous week, marking their worst performance in years despite efforts by Beijing to restore confidence in the economy and address the prolonged stock market decline that has seen a staggering USD 6 trillion in value disappear over three years, CNN reported.

The Shanghai Composite Index witnessed a significant 6.2 per cent drop, the most substantial weekly loss since October 2018, while the Shenzhen Component Index recorded an 8.1 per cent decline, marking its largest drop in three years. Year-to-date, both indexes have lost more than 8 per cent and 15 per cent, respectively.

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The CSI 300 index, composed of 300 major stocks listed in Shanghai and Shenzhen, also suffered a 4.6 per cent decline, marking its worst week since October 2022. The index is down 7 per cent since the beginning of the year, as reported by CNN.

Several issues are contributing to the challenges facing the world's second-largest economy, including a record downturn in the real estate market, elevated youth unemployment, deflation, and a declining birthrate.

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The International Monetary Fund anticipates China's gross domestic product growth to slow to 4 per cent in 2024, down from 5.2 per cent in 2023, reflecting one of the weakest performances in decades. Further declines are projected, with growth expected to dip to around 3.5 per cent in 2028.

The week commenced with a Hong Kong court ordering the liquidation of Evergrande, the world's most indebted property developer and a symbol of the real estate crisis. This move, the first of its kind by a Hong Kong court for such a large Chinese company, has raised numerous questions about the future of Evergrande and other insolvent developers.

Despite efforts to instill confidence, concerns persist among investors about China's economic trajectory. The People's Bank of China and the Chinese government recently announced plans to expand access to commercial bank loans for property developers.

"These policies indicate that healthier developers can therefore expect increased funding this year, while those struggling to clear their debts will likely go the way of Evergrande," said Diana Choyleva, chief economist for Enodo Economics, as reported by CNN.

While these initiatives briefly calmed investors, worries persist about the long-term outlook for China's economy.

Analysts at Bank of America highlighted the absence of clear policy guidance or initiatives to promote growth, with Chinese investors expressing "low expectations" for government stimulus measures.

China's economic challenges contrast sharply with the positive performance of its neighbour, India. India's benchmark Sensex index, tracking 30 large companies, and the broader Nifty 50 index have reached record highs in recent months, reflecting the potential of its rapidly growing economy. The International Monetary Fund projects India's gross domestic product to grow by 6.5 per cent in 2024 and 2025, outpacing major economies worldwide, CNN reported. (ANI)

(The above story is verified and authored by ANI staff, ANI is South Asia's leading multimedia news agency with over 100 bureaus in India, South Asia and across the globe. ANI brings the latest news on Politics and Current Affairs in India & around the World, Sports, Health, Fitness, Entertainment, & News. The views appearing in the above post do not reflect the opinions of LatestLY)