China’s stocks fell again on Thursday and by early afternoon seemed set for the biggest two-day drop on record, after the government tripled the tax on securities transactions, reports Bloomberg. The benchmark CSI 300 Index, which tracks yuan-denominated A-shares listed on China’s two exchanges, dropped 4.4 per cent to 3715.64 as of 10:06am local time. However, the FT reports that world financial markets largely shrugged off Wednesday’s sharp tumble in the red-hot Chinese stock market, with the US S&P 500 index ending at an all-time high. The 6.5 per cent sell-off in Shanghai shares barely triggered a tremor on Wednesday, with investor risk appetite still buoyed by acquisition activity, high levels of liquidity and the perception of a benign economic environment. The resilience was in sharp contrast to nervousness in February, when a similar drop in Chinese stocks sparked widespread turmoil.

This entry was posted by Gwen Robinson on Thursday, May 31st, 2007 at 5:51 and is filed under Capital markets. Tagged with china. Edit this entry.