SHANGHAI: China stocks fell to 16-month closing lows on Friday, extending losses even after state-backed newspapers and fund houses tried to calm investor nerves following a sharp sell-off last session on worries over faster US monetary policy tightening.
The blue-chip CSI300 index fell 1.2% to 4,563.77, while the Shanghai Composite Index lost 1% to 3,361.44.
** For the week, the CSI300 index went down 4.5%, dropping the most since August 2021, while the Shanghai Composite Index lost 4.6% in its biggest weekly decline in 11 months.
** "Sentiment had the largest weekly drop post September 2020," Morgan Stanley said in a note. "Divergence between US/China policy cycles continues since the year began and equity investors could sell ahead of CNY holidays to avoid uncertainty."
** Mainland Chinese markets will be shut for the week-long Lunar New Year holiday, starting Jan. 31.
** State-backed securities newspapers wrote in editorials, citing experts, that overseas risks could only have a limited impact on China, while a slew of Chinese mutual funds bought their own fund products, in efforts to soothe investor nerves after shares hit their lowest in nearly 16 months on Thursday.
** Energy stocks lost 2.9%, with coal miners were down 3.5%.
** Banks, consumer staples, semiconductors went down between 1% and 2%.
** However, shares in the tourism and education sectors closed up 2.1% and 5.6%, respectively.