China lost its title as the world's second-biggest stock market to Japan, due to its slowing economic growth and the US trade war threats looming on the country. According to the data compiled by Bloomberg, the value of Chinese equity listings slipped for the first time since taking the number-two spot in 2014. After a slump on Thursday, the country's equity valuation stood at $6.09 trillion, while that of Japan was at $6.17 trillion. The US holds the title of the world's largest stock market at a little over $31 trillion.

The Chinese stock market and its domestic currency have weakened this year, owing to its trade tensions with the US, a campaign led by its government to cut debts and its slowing economy. According to a statement by the head of research at CEB International Investment Corp in Hong Kong, the damage to Chinese equities was caused by the trade war and it slumped from its peak, while the Japanese equities have been relatively stable.

The Shanghai Composite Index lost over 16 percent in the year 2018, making it one of the worse performing indices in the world. Chinese currency yuan has fallen by 5.3 percent against the dollar.

On the other hand, Japan's stock market benchmark Topix declined by 3.9 percent and remains as one of the good performers in Asia. Close to 60 percent of the firms listed on the index have reported higher earnings than analysts expectations in the current season, as per Bloomberg reports.