Uh oh. Here we go again.
China's Shanghai Composite index shed 8.5% on Monday, a bone-rattling decline that raises questions about the government's ability to prevent a crash.
Beijing managed to stabilize markets with a dramatic rescue in late June and early July, intervening in a number of ways to limit losses for investors.
But the rout has now resumed: Monday's slump was the biggest daily percentage decline since 2007.
The vast majority of companies listed in Shanghai, including many large state-owned firms, fell by the maximum daily limit of 10%. Losses in Shanghai, and on the smaller Shenzhen Composite index, accelerated into the close. Shenzhen, which is heavy on tech stocks, closed down 7%.
Investors are worried about a possible withdrawal of stock market support by Beijing, and signs of a sharper slowdown in China's economy.
Industrial profit data released Monday indicate that factories in the world's second-largest economy are losing momentum. Profits dropped 0.3% in June, compared to the same period last year, the government said.
On Friday, an early measure of China's manufacturing activity for July came in below analyst expectations. The reading was the lowest in 15 months.
China's stock markets have been extremely volatile this year.
Video at link:
http://money.cnn.com/2015/07/27/investing/china-stocks-shanghai/
