China’s CSI 300 index falls 20% from June peak — CNBC

China’s key CSI 300 stock index has entered a “bear” phase, falling 20% from its peak level in June. The index tracks shares of the 300 largest companies listed on the Shanghai and Shenzhen stock exchanges.

Ten weeks of decline

The CSI 300 has declined for a tenth consecutive week. Since the start of the current week, it had lost another 2.6% at the time of publication, indicating sustained pressure on Chinese stocks. CNBC reports this, citing LSEG data.

Jordan Svetanovski, chairman and chief investment officer of Pella Funds, said that China’s stock market continues to face structural problems. According to him, the country’s economy is overcoming the consequences of years of excess production capacity and overinvestment.

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Pressure on corporate profits

Chinese companies are suffering from slowing profit growth amid fierce competition that is reducing margins. In September, China recorded its weakest growth in industrial profits this year.

In the second quarter, China’s economy, the world’s second-largest, showed its slowest growth in more than three years. It is under pressure from a years-long downturn in the real estate sector and persistent weakness in consumer demand.