Chart of the day: Stability rules China market
Stability is the dominating theme in China lately, and this also applies to its US$7.5 trillion stock market. This week, the 90-day volatility measure on the benchmark Shanghai Composite Index dropped to a level that has not been seen since 1992 before a key Communist Party congress in mid-October for a reshuffle of the top leaders. The China Securities Regulatory Commission said early this week that it would strive to ensure “stable operations of the capital market” and create a sound atmosphere for the meeting. Some traders see this as a signal that any wild price swings are unacceptable to the regulator. Trading was also light before the National Day holiday next week. Daily turnover on the Shanghai and Shenzhen exchanges averaged 431.9 billion yuan (US$64.8 billion) this week, 18 per cent less than the daily average since August, according to data compiled by Bloomberg.