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Trading shrinks as US$955 billion slump in China stocks frightens contrarians

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As China stocks slide and Evergrande teeters, trading sinks amid US$955 billion market wipeout in Hong Kong, Shanghai and Shenzhen

Traded volume in Hong Kong’s stock market slumped to a one-year low on September 20, or 38 per cent below the average in the first halfSome US$955 billion has been erased from stock capitalisation in Hong Kong, Shanghai and Shenzhen so far this yearChina stock marketJiaxing LiPublished: 7:30am, 27 Sep, 2023Why you can trust SCMP

Global investors have never been more risk-averse on Chinese stocks in over a year, as transactions in Hong Kong and mainland exchanges slumped. Yet, it may signal a turning point for long-suffering market bulls.

Average trading volume in Hong Kong has shrunk to less than HK$94 billion (US$12 billion) per day this month, a level not seen since September last year. The Shenzhen and Shanghai exchanges processed a combined 723 billion yuan (US$97 billion) of transactions per day, the lowest since May 2020, according to Bloomberg data.

Activity was lowest in the city this year on September 20 when HK$71.3 billion changed hands, a 38 per cent slump from the first six months this year. On the mainland, the low was 575 billion yuan on September 20, or 39 per cent off the pace in the January to June period.

The numbers suggest investors at home and abroad are abandoning the markets, discouraged by the poor outlook for Asia’s biggest capital market. Beijing has shunned a bazooka-style stimulus after a short-lived post-pandemic euphoria, abetting a US$955 billion market wipeout across the three exchanges this year.

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