Daily Report | Shanghai stocks fall to one-month low, Hang Seng pares monthly gains as BOJ disappoints

Shanghai stocks fell further on Friday to their lowest close in a month, while Hong Kong shares also ended sharply lower on the last trading day of July, after the Bank of Japan disappointed markets with modest easing moves.

Mainland China’s Shanghai Composite Index dropped 0.5 per cent, or 14.98 points, to end at 2,979.34 points, the weakest level since July 1. For the week, the index fell 1.1 per cent, paring its monthly gains to 1.7 per cent.

The large-cap CSI300 retreated 0.5 per cent, or 17.21 points, to 3,203.93 points. The Shenzhen Composite Index also shed 0.5 per cent, or 9.44 points, to 1,941.56 points. The start-up board ChiNext finished 0.8 per cent, or 17.33 points, lower at 2,122.41 points.

Combined turnover for Shanghai and Shenzhen continued to shrink on Friday, down to 432 billion yuan from 557 billion yuan on Thursday.

“The market sentiment has been weak since the second half of July, as investors turned cautious after the regulators signalled they would tighten rules on stock markets and curb speculative activity associated with hot topics,” said Zhang Fei, a stock analyst from Hunan Nonferrous Metals Group.

“A-share markets are still policy-driven to a large extent,” she added.