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 per cent 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 per cent 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 per cent, the consumer staples sector eased 1.51 per cent, the real estate index dropped 2.53 per cent and the healthcare sub-index lost 2.91 per cent.
The smaller Shenzhen index ended down 2.93 per cent and the start-up board ChiNext Composite index was weaker by 3.632 per cent. Around the region, MSCI’s Asia ex-Japan stock index was weaker by 1.09 per cent, while Japan’s Nikkei index closed down 1.53 per cent.