China’s Small-Cap Stocks Enter Bear Market on Slowdown
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China’s small-company stocks fell, dragging the benchmark index down more than 20 percent from its February peak, on concern valuations are too high as the economy slows and new share offerings divert funds.
The ChiNext index dropped 2.2 percent to 1,226.47 at the close in Shenzhen, entering a bear market after tumbling 21 percent from a record high of 1,558.62 on Feb. 17. The Shanghai Composite Index slid 5.5 percent during the period. Bocom International Holdings Co. and UBS AG predict further losses for the ChiNext as a housing slump adds risks to an economy that analysts predict will grow at the slowest pace in 24 years.