China Stock Market Rocked by Forced Sellers; Yuan Hits Fresh Low
- ‘Extreme pessimism’ is pervading the market, fund manager says
- Shanghai Composite Index has dropped about 30% since January
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Chinese shares extended the world’s deepest slump and the yuan touched its weakest level in almost two years, testing the government’s ability to maintain market calm as risks mount for Asia’s largest economy.
Fears of widespread margin calls fueled a 3 percent tumble in the Shanghai Composite Index, which sank to a nearly four-year low as more than 13 stocks fell for each that rose. Efforts by local governments to shore up confidence in smaller companies failed to boost sentiment. The yuan slid beyond its closely watched August low after the U.S. Treasury Department stopped short of declaring China a currency manipulator, a move that some interpreted as giving Beijing breathing room to allow a weaker exchange rate.