SHANGHAI: China stocks fell on Monday, as Beijing’s supportive gestures failed to steady a sliding market, with investors unsettled by higher global interest rates and trade tensions.
The US launching probes into technology firms including Luxshare Precision Industry and Foxconn Industrial Internet further dented risk appetite.
“The main anxiety comes from rising global yields,” Caitong Securities said in its market outlook.
“There’s also the tail risk of a potential debt crisis” stemming from the weakest governments in the euro zone, the brokerage said.
China’s large-cap CSI300 Index dropped 0.7 percent to a 13-month closing low, whilethe Shanghai Composite Index lost 0.4 percent.
In Hong Kong, the Hang Seng Index edged up 0.2 percent.
Market reaction was muted after China’s top securities regulator Wu Qing held a seminar with market participants on Saturday to hear their suggestions on improving the capital market. Investors also ignored draft rules published on Friday that would lower the threshold for setting up equity mutual funds.
The market has been dogged by the threat of rising bond yields as the widening war in the Middle East have kept oil prices above USD100 a barrel, fuelling inflation concerns.
Investors also worry that rising tensions with trading partners would hurt Chinese exports - one of the rare bright spots in China’s unbalanced economy.
On Friday, European Trade Commissioner Maros Sefcovic said China and the European Union had reached a deal that could cut Chinese exports of hybrid cars to the bloc by more than half. China’s commerce ministry said on Monday the arrangement would allow continued export growth.
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