Verdict Time for Chinese Stocks After Week Whipsaws Investors
- Signs emerging that Beijing will act to prevent equity bubble
- ChiNext is now on track to halt its five week gaining streak
Photographer: Johannes Eisele/AFP via Getty Images
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A rally in China’s small cap stocks is unraveling as quickly as it began amid signs that officials are attempting to prevent a bubble from forming.
The ChiNext gauge of mostly technology companies slumped 2.6 percent in Shenzhen on Thursday, taking its two-day loss to 7 percent, the steepest since June. Friday’s trading will dictate whether the gauge can eke out a sixth straight week of gains, or whether it halts its best winning streak since 2015. The ChiNext started this week with a 7.2 percent rally.