Stock market crashes always make investors nervous. But despite China’s outsized role in the global economy, the recent gyrations in its stock market will have limited direct impact on global investors. That’s because China’s relatively young equities market makes up a small share of overall global stock holdings.
Chinese shares fell again Tuesday, as Beijing scrambled to try to contain the selloff that has touched off fears about wider financial fallout in the world’s second-largest economy. After dropping more than 8 percent on Monday, Chinese regulators were reportedly buying stock to stabilize prices and the central bank pumped cash into the system to calm the turbulent financial waters.
The recent crash follows a dizzying bubble that saw the Shanghai composite index soar from just above 2,000 in July 2014 to a peak of nearly 5,200 in June 2015, before falling back to 3,500 in early July.