Shangai Index dips below 3k mark, invt lose $1.9 trillion

By Varinder Bansal/CNBC-TV18

The Shanghai Index has fallen 50% from its October high. It fell below 3,000 today from its record high of 6,092 on October 16. It had gained almost six times in the last two years. The surge was seen when the government converted most state-held non-tradable shares into common stock.

The index peaked on January 14 at USD 4.8 trillion. It has lost USD 1.9 trillion till yesterday, equivalent to the value of Canadian and German stock markets.

Inflation in China has accelerated close to a 11-year high in February. On April 13, the central bank Governor said interest rates could rise further to control inflation. To tackle inflation, the central bank raised interest rates six times to 7.47% and hiked the reserve requirement 15 times to 16%.

In 2008, China hiked prices of refined oil products, natural gas, and electricity. It also hiked home heating, water, gas, and transportation prices.