Chinese Stocks Plunge and It All Started With a Single Downgrade
- PICC drops by daily limit on bearish Citic Securities note
- Sell rating is like a ‘depth charge’ for the market: Lingze
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Chinese stocks tumbled the most in nearly five months as traders took a rare sell rating from the nation’s largest brokerage as a sign that the government wants to slow down the rally.
The Shanghai Composite Index lost 4.4 percent to close below the key 3,000 point level. People’s Insurance Company (Group) of China Ltd., which had become a poster child of the ramp-up in equities, saw its A shares sink by the 10 percent daily limit. Citic Securities Co. advised clients to sell the shares, saying they are “significantly overvalued” and could decline more than 50 percent over the next year. The stock had surged by the maximum allowed by the exchange for five straight days.