Chinese indices fall ahead of the Congress of the Communist Party of China

Chinese stocks are falling ahead of the Chinese Communist Party Congress, which will be held tomorrow, October 16th. Drawn attention to this Bloomberg. In particular, the Shanghai Composite index fell by 5% over the month; CSI 300 index — by 6.5%.

Wherein Shanghai Composite showed the worst result since the indicator was created in 1991 – 3016 points. The indices show the same dynamics. Shanghai SE A and Share SSE 100the fall of which for the period from September 12 to October 12 amounted to 5%.

A significant decline shows the yuan. Since the beginning of the year, the Chinese currency has fallen by 8.7% to 6.96 yuan against the dollar. This is one of the biggest annual declines since 2005, since China abandoned its dollar peg and switched to a floating exchange rate.

China’s dollar-denominated junk bonds have fallen to near-record lows as the effects of the real estate crisis deepen. Index CSI 300 fell 22% this year for the first time since 2011.

According to Bloomberg, this dynamic was the result of an escalation in Sino-US relations, as well as Beijing’s strict stance on covid restrictions. The agency believes that it was these factors that forced foreign investors to get rid of shares worth $875 million this week – the amount broke the July record. The Congress of the Communist Party is held every five years.

Anastasia Larina