SHANGHAI: China stocks slumped on Thursday, with major indexes posting their worst drop in more than six months, hit by investor concerns that policymakers may be starting to shift to a tighter stance to rein in share prices and property markets.
China’s short-term money rates climbed for a fourth straight session, with some key tenors approaching the higher end of the interest rate corridor, as tight cash conditions persisted and market worries over a switch in authorities’ policy stance mounted.
The Shanghai Composite index ended down 1.91% at 3,505.18, its lowest closing since Jan. 4 and biggest intraday fall since July 24.
The blue-chip CSI300 index was down 2.73% to 5,377.14, its biggest one-day drop since July 24.
“Alongside the previous PBOC warning on asset bubbles, fears of deleveraging drove China and Hong Kong equities lower,” said Ken Cheung, chief Asian FX strategist at Mizuho Bank in Hong Kong, adding that such market fears could discourage capital inflows into Chinese stock markets.
At close, the financial sector sub-index fell 1.35%, the consumer staples sector eased 1.51%, the real estate index dropped 2.53% and the healthcare sub-index lost 2.91%.
The smaller Shenzhen index ended down 2.93% and the start-up board ChiNext Composite index was weaker by 3.632%.—Reuters