Things didn’t go well in China on Thursday.
Initially, mainland shares held up reasonably well considering what happened on Wall Street Wednesday, but after a steady grind lower that featured more than 1,000 stocks trading limit-down, China’s benchmarks ended with outsized losses.
Some 300 companies fell by the daily limit in Shanghai, as the SHCOMP closed more than 5% lower. This was the worst day since February 2016. The index easily sliced through the 2016 lows, levels the vaunted “National Team” has attempted to defend in recent months.
600 listed companies fell by the limit in Shenzhen, where the Shenzhen Composite plunged 6.4%. The ChiNext suffered a similar fate. The gauge of tech shares and small caps dropped more than 6%, to the lowest levels since 2014.
Notably, the yuan aggressively trimmed losses against the dollar late in the day.
Later, commerce ministry spokesman Gao Feng appealed to the U.S. on trade, saying it is Beijing’s hope that Washington will abandon unilateralism and protectionism in favor of “constructive, concrete measures to maintain healthy economic and trade relations”.
China, Gao said, has been “rational” and has “exercised restraint” at every possible juncture.
If you’re wondering whether the rout on Wall Street might give Trump pause when it comes to the trade war, the answer is apparently “no”. “The problem is the Fed,” the President said Wednesday evening, in a phone interview with Fox. “China tariffs are not hurting”, he added.