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Hang Seng Index
BusinessMarkets

China stock rout deepens as market bears overwhelm local and foreign fund managers

  • Shanghai Composite Index slipped for a fourth day, losing 1.6 per cent in the market’s longest pullback since mid-November
  • Hang Seng Index rebounded 0.8 per cent in choppy trading day as market swung between 1.8 per cent gain and 0.8 per cent loss

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China stocks unravel further in the market’s longest losing streak in three months as bears pounce. Photo: Shutterstock
Martin Choi
China stocks slumped for a fourth day in the local market’s longest losing streak in three months as concerns over stretched valuation and rising bond yields weighed on sentiment. Hong Kong stocks arrested a slump in a rollercoaster day of trading.
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The CSI 300 Index, which tracks some of the biggest stocks in Shanghai and Shenzhen, fell 2.2 per cent to the lowest level since December 22. The gauge has declined 8.8 per cent over four days in the longest run of losses in three months.

The slide persisted even amid speculation state-backed funds were shoring up onshore equities and foreign funds were seen buying the dip with 2.4 billion yuan (US$375 million) of net purchases on Tuesday, after dumping 8.6 billion yuan on Monday, according to Bloomberg data.

The Shanghai Composite also fell for a fourth day, losing 1.8 per cent to 3,359.29, a stretch not seen since mid-November. The index logged a 2.3 per cent drop on Monday in the index’s biggest pullback since July 24. In Shenzhen, the tech-heavy ChiNext Index fell 3.5 per cent.

“We are in a volatile market,” said Louis Tse Ming-kwong, managing director of Wealthy Securities. “At this level, investors don’t have confidence to go into the market and buy things when [any] rebound quickly fizzles out.” Higher rates have put a ceiling on runaway tech stocks, he added.

The Hang Seng Index rose 0.8 per cent to 28,773.23 at the close, after swinging between a 1.8 per cent gain and a 0.8 per cent decline. The gauge, which slumped 1.9 per cent on Monday, may have more room to go down to about 27,800, Tse added.
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