China stocks drop to lowest in seven weeks amid bond market turmoil
Hong Kong stocks also extend their losing streak to a fourth day to touch their lowest close in five months
Chinese stocks slipped further on Tuesday to close at their worst level since early November, as continued turmoil in bond markets rattled investors after the People’s Bank of China signalled tighter control of banks’ high-yielding investment products to curb speculative credit growth.
Hong Kong stocks extended their losing streak too, dropping for a fourth day to touch their lowest close in five months.
The Shanghai Composite Index was down 0.5 per cent or 15.2 points to close at 3,102.88, the worst since November 2. The Shenzhen Composite Index dipped 0.1 per cent or 2.78 points to end the day at 1,981.32.
Among other major indices, the large-cap CSI300 finished down 0.6 per cent to 3,309.06, the Shenzhen Component gave up 0.4 per cent to 10,245.33, and the Nasdaq-style ChiNext Index inched lower by 0.1 per cent to 1,982.30.
We believe investor sentiment is particularly fragile at present, given that the liquidity strains are poised to drag on
Combined turnover for the Shanghai and Shenzhen markets continued to shrink, falling 4 per cent to 384 billion yuan compared with Monday.