BEIJING/SHANGHAI: Chinese shares dropped on Thursday, with the blue-chip index declining the most in more than seven months, as investors dumped consumer and materials stocks on concerns over high valuations.
The Shanghai Composite index was down 2.05% at 3,503.49, while the blue-chip CSI300 index was down 3.15%, its biggest one-day drop since January 2020.
The blue-chip’s consumer staples sub-index slid 4.91%, while the material sub-index fell 4.82%.
Tech shares were also sold off during the day, with the start-up board ChiNext Composite index falling 4.87% and Shanghai’s tech-focused STAR50 index down 2.59%.
Investors are rotating out of consumer, new energy and tech shares due to valuation concerns, and adding positions in undervalued property, banking and insurance stocks, said Yang Delong, investment manager at First Seafront Fund Management Co.
“Growing mutual fund redemptions amid market declines also worsen the sentiment, it’s not easy to turn it around,” said Zhang Qi, an analyst with Haitong Securities Co.
The smaller Shenzhen index was down 2.9%.
Chinese equities have come under pressure on worries around policy tightening, and investors now eye the parliamentary session that will chart a course for economic recovery and unveil a five-year plan to fight stagnation.
Foreign investors were net sellers of Chinese A-shares through the Stock Connect, with Refinitiv data showing large outflows through the programme’s northbound leg.—Reuters
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