On Tuesday 27th of February Chinese stock prices fell drastically, dropping by almost 9 per cent. This has been the largest decline since 1997 where it fell by about 9.4 per cent. Share prices of many large Chinese companies such as the Industrial and Commercial Bank of China or the Bank of China fell drastically, some even reaching the limit of ten per cent.

Specialists feel that the reason for the sudden drop was the fact that many investors unloaded stocks in order to ensure profit. The Shanghai index had reached a mark of 3,000, which to many investors seemed to be a good figure to sell shares and ensure profit.
The Chinese share prices have doubled last year as reforms were introduced to ensure the market would not be flooded by shares. Since then stock prices have been steadily growing until reaching a maximum on Monday 26th of February. Chinese stock market analysts said that the crash on Tuesday was merely a market adjustment and the Chinese stock prices will still continue to follow last year’s trend.

The drop in the Chinese stock prices has also greatly affected stocks worldwide, resulting in record losses. For example the New York, London, Japan and Toronto stock markets all experienced a loss. At the Wall Street stock market this has been the largest drop Since the Sept 11th 2001 terrorist attacks. The Dow Jones industrial average lost around 3 per cent, the Nasdaq lost around 3,5 per cent, the Nikkei 255 index lost around half a per cent and the London FTSE 100 Index lost about 2 per cent.