Chart of the day: Outlook dims for Chinese market darlings
A jump in the implied volatility index of China’s biggest listed companies probably foreshadows further declines in the group of market darlings for the rest of the year. The VIX of the 50 most valuable stocks on the Shanghai exchange began its upward spiral a month ago before hitting its highest level since July on Friday. Just a day earlier, the underlying SSE 50 Index dropped 2.4 per cent for the biggest loss in 20 months as concerns mounted that the turmoil in the bond market would spread to equities and increased regulatory oversight of asset management products would restrain fund inflows. The sell-off in Chinese-listed big-cap shares was broad-based on that day, with the CSI 300 Index slipping 3 per cent. Nevertheless, even after the declines, the SSE 50 and the CSI 300 still have accumulated gains of at least 24 per cent this year, making them the best performers among Chinese equities.