China's CSI 300 enters bear market after 10-week slide
China's CSI 300 benchmark fell into bear-market territory, down 20% from its June peak and lower for a 10th straight week, according to LSEG data. The index was off 2.6% for the week as Chinese equities remained under pressure. The sell-off comes as China's economy faces weak industrial profits and sluggish growth.
The CSI 300, which tracks the largest companies listed in Shanghai and Shenzhen, has dropped 20% from its June high, meeting a common definition of a bear market. LSEG data showed the index falling for 10 consecutive weeks and down 2.6% so far this week. The slump underscores persistent pressure on Chinese stocks.
Jordan Cvetanovski, chairman and chief investment officer at Pella Funds, told CNBC that China's equity market is still dealing with structural problems. He pointed to the consequences of years of excess capacity and overinvestment, saying the country is struggling to contain those legacy issues. Cvetanovski also said he sees selected opportunities in China's battery industry despite the broader difficulties.
Corporate earnings have added to the gloom. Chinese companies have faced weaker profit growth as fierce competition squeezed margins, prompting government intervention. In September, the country posted its weakest growth in industrial profits this year.
The stock market's decline comes against a backdrop of slowing economic growth. China recorded its weakest growth in more than three years in the second quarter, weighed down by a long property downturn and soft consumer demand. Those pressures have compounded the challenges for equities.
TopicsCSI 300 · Jordan Cvetanovski · Pella Funds · LSEG
Written by Paparazzi with AI. Not financial advice.