© Reuters. People walk past a screen displaying the Hang Seng index at Central district, in Hong Kong, China December 6, 2023. REUTERS/Tyrone Siu/File Photo
SHANGHAI (Reuters) -China’s blue-chip stocks slumped to an almost five-year trough on Wednesday while the yuan currency extended losses, as markets grappled with Moody’s (NYSE:) cut to China’s credit outlook at a time of growing worries about the economy’s stuttering recovery.
The ratings agency issued a downgrade warning on China’s sovereign credit rating on Tuesday, saying costs to bail out local governments and state firms and control its property crisis would weigh on the world’s second-largest economy.
China stocks opened down with the CSI300 Index touching its lowest level since Feb. 2019, before recouping earlier losses. It was 0.4% higher as of 0612 GMT, with the up by 0.1%.
Chinese markets have had a torrid time this year as a shaky economic recovery and a deepening property crisis have added to geopolitical challenges, including protracted Sino-U.S. tensions over tech and trade.
The CSI300 Index has tumbled about 12% so far this year and is set to record one of the worst performer in the region.
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