Day after Trump threatens more tariffs, Chinese stock market activity tanks 27 per cent
What happened to the Chinese stock market the day after President Donald J. Trump threatened an additional $200 billion in taxes on Chinese goods?
Chinese stock market activity dropped 27 per cent.
It was called "panic selling" by Yi Gang, Governor of the People's Bank of China.
Panic selling is when more people are selling rather than buying stocks. Since there are less buyers, stock prices fall because demand is lower.
China’s four state-owned financial newspapers issued front page editorials yesterday urging investors to “remain calm and think rationally”.
“The market fluctuation (yesterday) was mainly affected by emotions,” said Gang. He told investors "not to lose confidence". Individuals make up 90 per cent of the Chinese stock market.
Gang said "trading is inactive" and "money is very cautious."
The South China Morning Post (SCMP), is one of the official news sources of the Chinese Communist Party.
Gang took over the job in March.
Lynda Zhou, a portfolio manager at Fidelity, said China’s “disappointing” macro data for May has raised questions about the outlook of the economy.