China’s stock market has posted a huge one-day loss with the SSE Composite Index (SHA:000001) diving 6.4%. Losses may have been profit-booking that had come about as a result of the recent recovery since January 28. Traders and analysts cited a convergence of factors including tighter liquidity and apprehension over impending liberalization of initial public offerings (IPOs).
The Shanghai Composite closed the day at 2,741.25, just over 100 points above recent lows.
Elsewhere in the Pacific, gold, industrials and IT were among the sectors that took Australian stocks hgiher, closing up 0.13% on the S&P/ASX 200.
Japanese stocks were also trading higher with the Nikkei 225 posting a 1.41% gain, led by gains in the power, financial services and minerals sectors.
One day before the G20 meeting in Shanghai, anxiety mounted over the effect of high market volatility on the global economy. However, European shares were spared as most European markets are trading comfortably higher. Britain’s FTSE 100 (INDEXFTSE:UKX) gained 2.26% by Germany’s DAX gained 1.3%. France’s CAC was seen up by as much as 2%.
As for the United States, CMC chief market analyst Michael Hewson said today that U.S. markets reversed their losses because oil prices have been exhausted to the downside.
Investors are now raising their expectations around the G20 meeting of finance ministers and central bankers in Shanghai scheduled for Feb 26-27. The G20 summit is expected to discuss a coordinated policy response to calm volatile markets and investors are watching any official statements closely.