China stock market closes at $3,000 as stock market hits $3.000
China’s stock market opened at $2,742 a share at 7:40 p.m.
ET (4:40 a.m., Beijing time) on Tuesday, a sharp decline from Tuesday’s closing price of $3 and a five-month high of $2.766 a share.
The Shanghai Composite Index (SCI) was at $5,200.50, up 11.3 percent from the previous close of $4,812.50 a share and the longest such streak in more than a year.
The CSI is the only index in the world to have traded at or above $5 million since March 6, 2016, when it closed above $6,000.
It has now closed at $4.000, up 23.3% since then.
“The market has been very hot,” said David Tishkoff, chief market strategist at the investment bank Morgan Stanley.
“It’s a new low and it’s very difficult to get back to normal.”
Investors are concerned about China’s economy and its trade surplus.
China imports about 90% of its exports and is a major source of demand for the U.S. dollar.
The government says it needs to reduce its trade deficit to $3 trillion by 2019 to avoid a global financial crisis.
The central bank has set a goal of reducing the country’s trade surplus by 5% of gross domestic product (GDP) by 2020, from the current 6% of GDP.
China is a huge buyer of U.N. goods, such as soybeans and corn, but its government is also facing an export-driven slowdown.
The Chinese government has cut imports of some of its own goods and has stepped up efforts to boost exports of other commodities.
“I think it’s a good day for the market, the market has a little bit of a hold on the price,” said Mark Zandi, chief investment officer at Goldman Sachs Group Inc. “We expect China’s trade deficit is going to stabilize in the coming months, and the government will be able to reduce the trade deficit.
It’s going to have to.
And then you’ll have more room for growth.”
China’s stocks opened higher after the CSI closed higher.
The Shenzhen Composite Index opened up about 5.5% at 4,842.90, its highest since Feb. 20, but the market is still losing ground.
The Hang Seng index, a benchmark of China’s equity markets, closed down 2.2% at 5,203.50.
China’s benchmark benchmark index closed down about 3.4% on Tuesday.
“At this point in time, I think there’s a pretty decent chance that China’s trading deficit is coming to a close,” Zandi said.
“If that happens, I don’t see the country going into a crisis.”
The Shanghai Stock Exchange closed up about 1.5%, or 0.7%, at 2,741.25.
Shanghai’s benchmark index rose 3.3%, or 1.4%, to 1,988.50 on Tuesday and its Hang Shen index rose 2.1%, or 2.6%, to 3,639.25, its best since Feb., 20.
“What I’m seeing is a continuation of a fairly normal pace of growth,” said Richard Liu, director of market strategy at Barclays Capital in New York.
“And that will allow China to have a fairly healthy economic recovery and maybe a bit of growth at a time when people are looking for more opportunities outside the markets.”
China has been struggling to recover from a financial crisis in 2008 and 2009.
It was forced to slow spending and increase borrowing to ease its financial woes.
China last year became the world’s biggest consumer of commodities, and this year is expected to be the first in six years to record the highest growth in commodity consumption in nearly two decades.
China has also struggled to reduce a huge trade surplus, which accounts for about 70% of the countrys trade.
China was expected to import $6 trillion worth of goods last year, the highest since at least 1998.
The International Monetary Fund has warned that the country is running out of room to borrow, raising questions about whether China will have the cash to pay its bills or pay its imports.
China said it would spend $8 trillion on trade over the next two years to shore up its exports.
“In the last two years, we’ve had very, very strong trade growth in the third quarter,” said Jonathan Goglia, chief emerging market economist at Capital Economics in New London, Connecticut.
“This is the first time in a while that we’ve seen the third-quarter growth in exports.
That’s an important signal.”
The United States and Europe are seeing the biggest trade surpluses in decades.
Last week, the United States Commerce Department reported that exports to the European Union rose 4.