STOCKS in China fell sharply yesterday, but still remain at an elevated level.
The benchmark Shanghai composite index – which includes shares of all companies listed on the Shanghai stock exchange – closed 5.4 per cent down.
Investor sentiment seemed to be hit elsewhere as the FTSE 100 and German Dax closed two per cent down. The French Cac 40 closed 2.5 per cent down.
Stocks in the US were relatively unscathed, with the Nasdaq and Dow registering little change.
The Shanghai index has made rapid gains over the last month – it was at just 2,500 three weeks ago before peaking at 3,020. It closed at 2,856 yesterday.
The recent rally correlated with a cut in interest rates by China’s central bank as officials try to revive growth.
Official figures put China’s growth at just over seven per cent per year but this is still below the double digits seen before the financial crisis.