The bearish mood cast over China’s stock market has been so extreme in the last 14 trading sessions that China’s “national team,” otherwise known as the “plunge protection team” (in US terms), or state-backed funds, stepped in earlier this week to shore up equities after the nation’s benchmark CSI 300 Index plunged into a correction. The communist government took the intervention over the top by censoring “stock market” hashtags on popular social media channels.
In just 14 trading sessions, the CSI 300 Index plunged more than 15% from a 13-year high. The sudden selloff wiped out $1.3 trillion in value and crushed retail investors who bought the peak, hoping that the new lunar year of the Ox, or bull, would lead them to new riches. Guess not…
Earlier this week, we noted state intervention in the form of the “national team” showed up to purchase equities for stabilization. The national team is equivalent to the US’ “plunge protection team.”