OREANDA-NEWS  The Chinese stock market has experienced its biggest drop in the last five months. The collapse of the indices is reported by the Financial Times (FT).

The CSI 300 index of Chinese blue chips declined by 2.5 percent. Later, the rate of decline slowed, and the final drop for the day was 2.1 percent. The Hang Seng China Enterprises index (reflecting the dynamics of Chinese stocks in Hong Kong) fell by 1.25 percent to 8937.1 points.

According to Zhao Jian, head of the Hong Kong-based Atlantis Investment research institute, market participants decided to lock in profits against the backdrop of rising shares of technology companies. Another reason could be the discussion by the Chinese authorities of measures to cool the stock market, BNY senior strategist Wee Khun Chong added.

As Bloomberg notes, China is concerned about the rapid growth of the market, which has added $ 1.2 trillion since August. The authorities are considering a possible partial lifting of restrictions on short sales and control of speculative trading.

There are signs of overheating in China now, as in 2015, so management wants to ensure more sustainable growth that would revive the economy and consumer sentiment. According to CSRC Chairman Wu Qing, it is necessary to ensure the stability of the stock market, promising to consolidate the "positive momentum" and promote "long-term, cost-effective and rational investments."

Earlier, Bloomberg experts predicted a gloomy future for the Chinese stock market. Analysts said that consumption in the country remains weak, the housing crisis continues, and other growth engines are stalling. From this, it was concluded that the stock market is unlikely to show any significant growth unless the authorities step up efforts to restore the economy.