26th January 2016
Chinese stocks fell sharply in late trade on Tuesday, as concerns over oil prices persisted despite the central bank pumping new cash into the market.
The benchmark Shanghai Composite closed down 6.42% at 2,749.79, a 13-month low, while Hong Kong’s Hang Seng shed 2.48% to 18,860.8 points in afternoon trade, according to the BBC.
Brent crude oil fell below $30 a barrel after its previous rally and news emerged that oil production hit a record high last month, triggering anxiety in US and Asian markets.
Japan’s Nikkei 225, which is Asia’s biggest index, fell 2.4%, closing at 16,708.90.
Business Insider reports that accelerating outflows in the Chinese stock markets are putting mounting pressure on authorities to devalue the currency. It says: “to support the currency, policymakers have been burning through the country’s foreign reserves at a rate of about $100 billion per month.”
However, it adds that when China devalued its currency by just a few percent in the summer, The Shanghai index collapsed more than 8% and kicked off a month of market turmoil in global share markets.