A dramatic correction, along with frequent bouts of extreme volatility over the past few months, are getting analysts increasingly concerned about the fragile state of China’s stock markets.
The Shanghai Composite ended Tuesday up 2.2 percent at 4,575.12, not before slumping to a more than three-week trough of 4,264.77 intra-day.
The wild move came on the back of a 13.3 percent tumble last week, the benchmark index’s sharpest weekly drop since the global financial crisis. Analysts largely attribute the dramatic plunge to a raft of initial public offerings (IPOs) that locked up an estimated 6.7 trillion yuan ($1.1 trillion) worth of funds, as well as regulatory efforts to rein in excessive levels of leverage.
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