New | China indices tumble in afternoon trade; Shenzhen knocked for 6pc loss
China’s major stock indices end sharply lower in session capped by late surge in selling
Major Chinese indices fell sharply on Wednesday, as skittish investors veered from some early morning profit taking straight into a full blown selloff, on concerns the government will not ease policy as expected.
Shenzhen was the worst hit, with the city’s main composite index closing down 5.9 per cent at 1,889.13 while the small-company stocks tracking ChiNext index was off 6.6 per cent at 2,344.74. It was the market’s biggest one-day drop in five weeks, though a late rebound helped to mute the scale of the selloff. The Shanghai Composite fell 3.1 per cent to 3,320.68, and the blue chip tracking CSI 300 ended 2.92 per cent weaker at 3,473.25.
“People got nervous and defensive. They were expecting a RRR [required reserve ratio] cut and sectors that had outperformed the market, like media and IT, these stocks started to correct,” said Gerry Alfonso, a director at Shenwan Hongyuan Securities in Shanghai.
“There is not any major fundamental development in the market but people are nervous,” he said.
Reducing the required reserve ratio is a common policy lever used by authorities to boost credit to businesses and consumers.
In Hong Kong markets were closed for a public holiday. Trading will resume on Thursday.
