The Chinese stock market experienced the worst day in nearly two years on Friday, led by the fall of “blue chips”, flagging heightened correction concerns on the stock exchange after another collapse of the US stock market last night.

Shanghai Composite Index fell 4.0 percent to 3,130.93 points, while the CSI300, tracking the value of securities of the largest companies traded in Shanghai and Shenzhen, lost 4.3 percent and finished trading at 3.841.27 points. At some point, both indexes dropped by more than 6 percent.

This was the strongest one-day drop for both indices since February 2016.

All major sectoral subindexes, both in China and Hong Kong, went into negative after the shares of companies in the financial sector and the real estate sector.

At the same time, the Hong Kong stock market suffered the most significant weekly losses since the global financial crisis. The index of Hong Kong Stock Exchange Hang Seng fell by 3.1 percent to 29.507.42 points, and the index of Chinese companies traded in Hong Kong, lost 3.9 percent, to close at around 11.901.67 points. For this week, Hang Seng sank 9.5 percent, demonstrating the maximum weekly decline since October 2008.

The most likely reason for the severe decline is mild inflation figure along with position liquidation ahead of the long period of New Year Holidays.

Concerns about the health of the world’s second-largest economy resumed in the market after the data released on Friday showed that consumer inflation and producer prices in China slowed in January.

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