Tue, Oct 09, 2018 - Page 11 News List

Chinese stocks slump after holiday

Bloomberg

A man walks past a bank’s electronic board showing the Hong Kong share index at the Hong Kong Stock Exchange yesterday.

Photo: AP

Chinese stocks yesterday tumbled as the nation’s markets resumed trading, capping their worst performance since 2008 after a week-long holiday. The yuan dropped with bond futures.

The CSI 300 Index closed down 4.3 percent in Shanghai, with tech companies among the biggest drags, after Hong Kong equities tumbled last week.

A gauge of large caps saw its biggest loss since January 2016.

China’s currency fell as much as 0.76 percent against the US dollar to its weakest since the middle of August, while futures on 10-year sovereign bonds dropped 0.1 percent.

Chinese investors faced a barrage of negative news from last week, including weak manufacturing data, a close call between a US and a Chinese destroyer, a North American trade deal that is set to sideline China, accusations of election meddling and a Bloomberg News report that the country spied on US companies.

A move by the People’s Bank of China to cut the amount of cash lenders must hold as reserves failed to soothe the market.

“Sentiment will remain cautious in the near term as people watch further developments in Sino-US relations,” said Linus Yip (葉尚志), strategist with First Shanghai Securities Ltd (第一上海證券). “I would suggest investors take a defensive approach and watch utilities, oil stocks, as well as infrastructure and rail names that are backed by China’s supportive policies.”

Foreign investors dumped 9.7 billion yuan (US$1.4 billion) worth of A shares via stock trading connections, Bloomberg calculations based on daily trading turnover showed, the second-highest net selling on record.

Hong Kong stocks lost 4.4 percent in the four days through Friday after a holiday on Monday last week, some of the worst declines in the world.

A prediction of a “full-blown trade war” next year by JPMorgan Chase & Co strategists added to the gloom.

The Hang Seng Index yesterday closed 1.4 percent lower for a fifth day of losses, led by Country Garden Holdings Co (碧桂園), Galaxy Entertainment Group Ltd (銀河娛樂) and Sunny Optical Technology Group Co (舜宇光學).

Tencent Holdings Ltd (騰訊) slid 2 percent, below the key HK$300 level as it dropped for a seventh day.

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