Shanghai Composite Index tumbles the most since China imposed coronavirus lockdowns five months ago
- Hong Kong stocks see steep losses; SMIC plunges 25 per cent, while its A shares debuting on the mainland shoot up more than 200 per cent
- Kweichow Moutai falls the most in 20 months
Overheated China stocks saw their biggest daily percentage tumble in more than five months, as traders scrambled for the exits on fears of more cooling measures and tighter monetary policy.
The panic selling left the Shanghai Composite Index as the worst percentage performer out of 93 major global indices on Thursday, according to Bloomberg data.
Hong Kong – where Chinese stocks account for more than 50 per cent of the market capitalisation of the Hang Seng Index – did not escape the carnage.
Upbeat data showing China is recovering from the worst of the coronavirus sparked fear that Beijing will tighten the liquidity taps. This came on top of recent warnings and steps by Chinese authorities to cool markets, fearing anything akin to a repeat of the 2015 meltdown in the country that wiped out US$5 trillion in market capitalisation and left many retail investors terrified to return for a long time.
The Shanghai Composite Index fell 4.5 per cent. That was its single biggest fall since February 3, when traders returned from an extended and chaotic holiday as lockdowns in Wuhan – ground zero of the outbreak – and other cities aimed at controlling the spreading coronavirus disrupted travel and upended businesses. The Shanghai Composite fell 7.7 per cent that day.
