Wednesday, 8 July 2015

Chinese stocks plunge, Goldman Sachs predicts strong rebound

The slide in the Chinese stock market is showing no sign of coming to an end.

The Shanghai Composite Index fell 5.9 percent today to a three-month low at the close. The CSI 300 plunged 6.8 percent. Hong Kong's Hang Seng Index fell by 5.8 percent.

Despite the continuing decline, at least one analyst remains bullish on Chinese stocks. Kinger Lau, China strategist for Goldman Sachs, predicts that the CSI 300 will rally 27 percent from Tuesday’s close over the next 12 months as government measures boost investor confidence and monetary easing spurs economic growth.

“It’s not in a bubble yet,” Lau said in an interview. “China’s government has a lot of tools to support the market.”

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