Chinese stocks capped their steepest weekly retreat since April as surging money market rates reduced investor demand for the nation’s assets.
The Shanghai Composite Index slumped 3.4 percent this week, ending 0.2 percent higher at 3,122.98 at Friday’s close.
Property companies fell the most during the week, with China Vanke Co (萬科) plunging more than 9 percent.
A regulatory crackdown on insurers’ stock investments added to investor jitters. China Huishan Dairy Holdings Co (中國輝山乳業) on Friday suspended share trading after short seller Muddy Waters Capital LLC said the company is “worth close to zero.”
Shares in Taiwan edged lower on Friday as investors consolidated earlier gains, dealers said.
The TAIEX closed down 33.57 points, or 0.36 percent, at 9,326.78. The index is down by 0.7 percent from last week’s 9,392.68.
The Hang Seng China Enterprises Index lost 0.1 percent, taking its weekly loss to 4 percent.
China’s sovereign bonds capped the biggest weekly decline in two years as the Chinese central bank sought to force a correction in the highly leveraged debt market by steering money market rates higher.
The MSCI Asia Pacific Index rose 0.2 percent to 135.90 as of 4:54pm in Hong Kong on Friday.
Six of the 11 primary groups advanced, led by industrial and consumer discretionary companies.
The benchmark rose for the third time in four sessions on Friday, paring this week’s decline to 1.8 percent.
Japan’s TOPIX erased this year’s decline after the yen held losses. The index rose 1.6 percent this week.
Automakers and electric appliance producers climbed as Japan Airport Terminal surged the most since July.
Volume on the CSI 300 Index was 39 percent less than its 30-day average, according to data compiled by Bloomberg.
“We are facing too many uncertainties,” including the US interest rate outlook and capital outflows from China, Hong Kong-based UOB Kay Hian Holdings Ltd (大華繼顯控股) executive director Steven Leung (梁偉源) said.
“Before we see more firm views on these factors, investors will not simply jump into the market. Without too much liquidity in the market, it’s not easy to see a big rally, but the downside is still limited, because the economic situation is still steady,” he said.
China’s 10-year sovereign yield has surged 25 basis points this week, the most since December 2014, to 3.35 percent on Friday. The one-year yield jumped 50 basis points, while the five-year rose 27 basis points.
Additional reporting by staff writer, with CNA
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