Shanghai Index Down 65 Percent In 2008

Shanghai Index Down 65 Percent In 2008

The Shanghai Composite, which measures the combined share value of most of the large public companies in China, fell 65% this year. Among the major US indices, the sharpest drop was the 39% plunge in the Nasdaq. The Dow Jones Financial Index, which should have done as badly as any stock measurement in the world, was off 55%.

One of the most popular adages on Wall St. is that stock markets trade based on what investors think will happen to the economy and corporate earnings looking out into the future by six months. If that is true, the movement in the Shanghai Composite is ominous. It has dropped 20% in the last 90 days. Over that period, the DJIA is down only 12%.

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