BEIJING — China's benchmark stock index tumbled 7.7 percent on Tuesday — the steepest decline in a year — underscoring a growing unease among investors about long-term prospects for economic stability.
The Shanghai Composite Index fell by 257 points in the first day of trading since the Chinese central bank said over the weekend that it would tighten credit outflows by raising reserve ratios on consumer banks by 1 percent this month to a record-high level. With the markets closed for the Chinese Dragon Boat Festival on Monday, Tuesday was also the first day of trading since the price of oil hit $140 a barrel, another likely factor in the sell-off, economists said.
Over the weekend, the People's Bank of China said it will increase this month to 17.5 percent the amount of cash banks must hold in reserve, on the heels of growing concern over rising consumer inflation and worries about the cost of damage and rebuilding after the May 12 earthquake in the Sichuan province. The bank has raised reserve ratios multiple times in the past year, hoping in part to help curb record inflation. Consumer prices rose by a near-record 8.5 percent in April and figures for June are due out on Thursday.
Analysts said Tuesday's drop was likely temporary and the markets would recover. "I think the market is overreacting," said Zhai Biao, an analyst with Guotai Junan Securities. "There are emotions involved."
China's volatile stock exchanges, widely considered heavily overvalued, have fallen by 44 percent since the start of this year. On Tuesday, Internet chat sites were ablaze with angry reactions after the stock plunge, with many commenters critical of a perceived failure of government policies to protect investors.
Cautioned one: "Remember, very few people make money in the stock market — it's like getting a ticket for the opening ceremony of the Olympics."
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)
@heriethpaul and @gracebol have a moment on the @victoriassecret fashion show 2017. See every look from the runway on WWD.com. Link in bio. (📷: @giovanni_giannoni_photo) #wwdfashion #victoriassecret #VSFashionShow
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia