Chinese analysts point finger at US Federal Reserve for global market rout, dubbing it 'enemy within'
Market gyrations should not be pinned squarely on Beijing, mainland observers say, pointing to US monetary policy and oil prices
The global market rout has been blamed on the CFO – China, the Fed and oil – but mainland analysts and fund managers said on Tuesday that Beijing’s culpability had been exaggerated.
The US Federal Reserve and its policy direction were the real “enemy within”, they said.
“It is unfair to blame China for the market crashes,” said Zhou Ling, a hedge fund manager at Shanghai Shiva Investment. “China’s troubled economy and falling oil prices aren’t news at all, but the sharp fall in the global markets appears to be an epidemic and all of them seemed to be entwined.”
READ MORE: China Markets Live - Early calls, price forecasts and analyst views
Zhang Ming, a researcher with the Chinese Academy of Social Sciences told China Business News that emerging markets, including China, were the main victims of the Fed’s rate increases as they led to a wave of currency devaluations that triggered capital outflows from the countries.
“The gloomy sentiment that swept the global markets [added to] investors’ worries about their financial investments,” Cinda International Securities said in a report. “Mainland investors are panic-stricken. They are expecting regulators to roll out more market-boosting measures.”
The benchmark Shanghai Composite Index fell 7.63 per cent to 2,964.97 on Tuesday, following an 8.49 per cent drop a day earlier, while a glut in oil supply has contributed to steadily falling prices.
“The panic selling was overdone,” said Yang Ling, chief strategist at Beijing StarRock Investment Management. “The market is expected to bottom out in the near future.”