New | More funds expected to quit Chinese stocks
Energy and utilities sectors to bear brunt of sell-off as investors pull out on concerns over US interest rates and weak commodities prices
More fund withdrawals are expected on the mainland markets as concerns over the economic slowdown linger, with the energy and utilities sectors tipped to take a further hit.
The prospect of a tightening interest rate cycle in the United States, fluctuations in foreign exchange rates and the damage wrought by weak commodities prices are additional dampers on the outlook.
Mainland and Hong Kong equity markets saw a weekly net outflow of about US$653 million as of last Wednesday, excluding local funds, marking the fourth consecutive week of outflows, according to fund flow tracker EPFR Global.
The average weekly outflow for the past four weeks was US$824 million, against US$504 million for the previous four-week period.
Among sectors, energy and utilities stocks suffered sharp withdrawals in October, while consumer and technology plays saw an increase in asset allocations, EPFR figures showed.
A gauge tracking Shanghai-listed energy companies fell 7 per cent last week to a four-week low, underperforming the benchmark index.