China’s benchmark equity index seems impervious to good news. Despite a brightening domestic economy, a successful transfer of power in Beijing and efforts by regulators to boost participation, the Shanghai Composite has tumbled. On Tuesday, it closed below 2,000 points for the first time since January 2009.

The Shanghai market is largely closed to foreign investors, who can only access mainland-listed shares, known as A-shares, through a restrictive quota system. Instead, global investors tend to buy Chinese companies via their Hong Kong listings, or H-shares. These have rallied 15 per cent since September as foreigners turn more bullish on Asia’s largest economy.

The domestic Chinese investors who dominate trading in Shanghai have had plenty of bad news to weigh up over the past couple of years. China’s economy has slowed for seven straight quarters and is on track to record its lowest annual rate of growth for a decade this year.