DHARAMSALA, August 3: Amidst escalating trade war with the US, Chinese shares ceded their ranking as the second-largest stock market in the world to Japan.
China has been knocked from its perch as the world’s second-biggest stock market by Japan following a months-long rout that has wiped $2.29tn off the value of its stocks from their January high, reports the Financial Times.
The report further stated that it is the first time that China ceded the title of world’s second-largest stock market since it leapfrogged Japan for the number two spot in November 2014.
“The fall also underscores how the ongoing trade spat with the US, Beijing’s campaign to temper debt-fueled growth and signs of slowing domestic demand have combined to dampen investor sentiment for Chinese assets,” the report stated.
Data from Bloomberg show Chinese equities were worth $6.09tn as of Thursday’s close, while Japan’s market was valued at $6.16tn, while the US remained the biggest stock market at $31tn, the report noted.
While economists maintained that the Chinese stocks have been hit this year as uncertainty over Beijing’s trade relations with the US continue to persist, the Chinese state Media has predicted in a rare and candid commentary earlier this week that Chinese firms will go bankrupt and private companies will be worst-hit by the wrath of the trade war with the US.
“Many Chinese firms will go bankrupt and private companies will be worst-hit by the escalating trade war between US and China,” said a commentary with a rare candid assessment by the official newspaper of China’s courts, the state-run People’s Court Daily.