Chinese mainland shares open lower Tuesday, as investors are unnerved by Wall Street rout
An unexpectedly heavy tumble on US stock market on Monday has cast a shadow over stock markets around the world, including the Chinese mainland’s A-share markets which opened lower in Shanghai and Shenzhen on Tuesday morning.
The Shanghai Composite Index slipped by 0.96 percent at opening, while the Shenzhen market was down 1.21 percent. The ChiNext gauge of smaller companies in Shenzhen also opened down 1.22 percent.
The decline further deepened in the morning session. As of 10:00 am, the ChiNext board had edged down by more than two percent. Chips, gaming and education shares led the plunge.
The A-share market’s decline was linked to overnight events in the US. Wall Street’s S&P 500 tumbled by 3.9 percent to a new low this year in what overseas media described as entering a bear market, the Dow Jones fell more than 875 points, or 2.8 percent, while the Nasdaq slid 4.7 percent.
The tumble was an instant reaction to the news that the surging inflation in the US is yet to peak, which the Wall Street Journal claimed it could prompt the US Federal Reserve to raise the short-term interest rate by three-quarters of a percentage point on Wednesday.
Experts said that US stock volatility in the face of inflationary pressure may affect A shares both good and bad ways.
“On the one hand, it would make global investors look more closely at mainland assets as a safe haven. However, if US stocks drop too mucj, it would have a spillover impact on Hong Kong market and A-shares as well,” Xi Junyang, a professor from the Shanghai University of Finance and Economics, told the Global Times.
The Hang Seng Index in Hong Kong also slipped by 1.35 percent on Tuesday morning, with the share price of many tech giants like Alibaba and Baidu plunging by more than 5 percent.
As of press time, Japan’s Nikkei stock index was down by about 2 percent.
Source: Global Times