China’s stock benchmark extends biggest drop in nine weeks as interest rate outlook and IPO glut weigh on sentiment
- Traders cautious ahead of key data release for June
- Hang Seng Index extends decline for fifth consecutive session
China’s stocks extended their steepest decline in nine weeks on Tuesday, as concerns about global monetary policies and increased stock supply continued to weigh on sentiment.
The Shanghai Composite Index fell 0.2 per cent to 2,928.19. The benchmark had tumbled 2.6 per cent in the previous session on fears the Federal Reserve would not cut interest rates soon amid improved US jobs data and a slew of IPOs would drain liquidity.
Hong Kong’s Hang Seng Index slid for a fifth session. It fell 0.8 per cent to 28,116.28.
Traders also refrained from buying on dips before the release of a set of key economic data for June. The National Bureau of Statistics is expected to release June consumer and factory-gate inflation data on Wednesday, while trade figures are due on Friday.
“The market hasn’t stabilised and the headwinds are still there, weighing on the market,” said Wu Kan, an investment manager at Soochow Securities in Shanghai. “Investors remain cautious.”
As many as 23 companies will launch initial public offerings on the mainland’s exchanges this week. Of these, some 21 companies are seeking to list on the Science and Tech Innovation Board, also known as the Star Market, which will start trading from July 22.