Shanghai index takes plunge

Chinese stocks plummeted this morning, a reaction to the government’s attempts to deflate the market bubble.

Chinese stocks plummeted this morning, a reaction to the government’s attempts to deflate the market bubble.
The Shanghai Composite Index, the Chinese benchmark, fell 8.3%, hitting 3,670.40.
Meanwhile, the Shenzhen Composite index fell 7.9% to 1,039.90.
This was Shanghai’s largest dip since the Feb. 27 fall of 8.8% that spurred global stock sell-offs.
In its latest attempt to cool the stock market, the China’s Ministry of Finance raised the stock trading tax to 0.3% from 0.1% last Tuesday.
At the time, the market boom had raised Chinese stocks by more than 50% since the start of the year, the Associated Press said.
Despite last week’s declines, the Shanghai index is up more than 37% since the start of the year, but has dropped 15% since Tuesday’s high of 4,334.92, the AP reported.
Throughout May, the government has widened the yuan’s trading band against the dollar and raised interest rates, but investors remained unfazed and continued pouring money into the market.