Chinese shares crash, impact on global markets side ways and too much volatility

Chinese shares crash for the 2nd day; falls below 7 per cent:

Chinese stocks fell for the second day today following the 8.49 per cent loss on Monday, which had devastated markets in India, the US and elsewhere over fears of hard landing of the world's second largest economy.

The volatility of the market which started since June diluting about USD four trillion worth of capital made about 20 million to leave the stock market after heavy losses.

Chinese analysts generally attributed yesterday's A-shares crash to investor disappointment with the People's Bank of China (PBC), the country's central bank, after it failed to announce an expected cut on the banks' reserve requirement ratio (RRR) over the weekend.

While the central government announced over the weekend a policy allowing no more than 30 per cent of net assets of USD 547 billion pension funds to be invested in the domestic stock markets, Guojin Securities said that it would have very a limited impact on the markets in the short term.

Chinese mainland stocks also took a severe hit from Wall Street, which suffered its steepest fall in nearly 4 years on Friday.

The US is expected to raise interest rates by the end of the year, while China is pushing forward with a series of financial reforms, such as the recent change to the yuan's daily official guidance rate against the greenback," Sun said.