Global stock index compiler MSCI is deleting dozens of companies from its benchmark China Index, which could further worsen money outflows from Chinese stocks.
The news comes on top of an already massive stock market rout.
The index provider announced this week that it would drop 66 securities from the MSCI China Index—one of its flagship tools for the Chinese market. Furthermore, this is the biggest number of companies removed in at least two years.
The removal of Chinese stocks comes amid worries about China’s troubled economy.
China’s stock markets have been in a protracted slump since recent peaks in 2021, with more than $6 trillion in market value having been wiped out from the Shanghai, Shenzhen, and Hong Kong markets.
Investors are concerned about a myriad of challenges facing the world’s second-largest economy, including but not limited to a prolonged property downturn, high youth unemployment, deflation, and a rapidly falling birthrate.