After a short rise on Tuesday, Chinese stocks have resumed their decline, as investors hurried up to take profit in the middle of the overall depression on the market. The CSI300 Index, which consists of the wealthiest firms of Shanghai and Shenzhen, dived by 0.4% to 2,948.64 points, while Shanghai Composite Index lost 0.4% as well, closing up at 2,739.25 points.
Chinese government continues to stick to their consumption stimulation policy, now lowering the advance payment requirement for 1st and 2nd house purchases. The measure is supposed to decrease the excess in real estate market, negatively impacting Chinese economy. Some analysts expressed an opinion that new rules may have negative consequences, like creating additional pressure on national currency and slowing down investments in this sector.
Hong Kong shares plunged by 2% on Wednesday, as deteriorating fuel market leads to a steady sell-off of energy shares. The drop is escalated by the pressure in insurance sector, after Chinese government rolled out new rules for purchasing insurance products using credit cards. Hang Seng index stepped back by 2.3% to 18,991.59, China Enterprises Index is down by 2.5% to 7,858. 31points.
Energy prices remain depressed, as Oil surplus stops any attempts gain some price. WTI returned by 2% to $30.41 after a 5% sharp sell off on Tuesday, as American Petroleum Institute reported that US crude reserves increased by 4M barrels, exceeding 500M barrels in total reserves. Brent prices continue ascending movement ahead of the Energy Information Administration’s (EIA) release, adding 1.77% to $33.30. The EIA data will probably report an increase in stockpiles. WTI’s current pull-back to slightly above $30 level may signal its breakout and return to $25 level.
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