China’s markets plunged for the fourth day in a row

Take a deep breath.
Take a deep breath.
Image: Reuters/Brendan McDermid
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Updated on Aug. 25 at 5pm in Hong Kong

After several days of global panic that caused steep drops in stocks and other markets around the world, investors in Asia seem to be picking and choosing among stock markets. By mid-morning on Tuesday (Aug. 25) in Hong Kong, nearly every major stock market in Asia had turned positive, with the exception of China’s, which were still sharply down. By the end of the trading day, though, Japan had joined China’s markets in negative territory.

China’s Shanghai Composite blew through the 3,500 level at which the government had been supporting it on Aug. 24, and closed below 3,000 today. The market’s new lows suggest that Beijing has decided to abandon supporting the Shanghai stock market, after throwing more than $1 trillion in stimulus at it in recent months.

But the upswing in other Asian indexes shows that investors are differentiating between China’s problems and those in the rest of the world, where nearly all economies are dependent on China to varying degrees. “Our bottom line is that the world’s still not a bad place,” David McDonald, Credit Suisse’s chief Australia strategist, told Bloomberg.