Chinese stocks slip lower, taking breather after recent gains related to Beijing’s stabilising measures

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Mainland Chinese stocks were generally lower on Thursday, as investors assessed the outlook following gains earlier in the week that were driven by signs the government would roll out supportive fiscal and tax policies. Photo: AP

Published: 7:32pm, 20 Sep 2018Updated: 7:32pm, 20 Sep 2018

Chinese stocks traded in Shanghai and Shenzhen slipped on Thursday, led lower by declines in telecommunications and technology stocks taking a breather from recent optimism over supportive policies from Beijing to offset the adverse impact from the escalating trade war between the world’s two biggest economies.

The Shanghai Composite Index edged lower 0.1 per cent or 1.61 points to 2,729.24. The CSI 300 – which tracks large companies listed on China’s two major exchanges – decreased 0.1 per cent or 2.35 points to 3,310.13.

The Shenzhen Composite Index fell 0.2 per cent or 3.20 points to 1,420.02 and the Nasdaq-style ChiNext was down by 0.3 per cent or 4.78 points to 1,387.62.

“There doesn’t seem to be a big threat to China’s economy for now given the boost from infrastructure investment but the price action in the market was a bit too much,” said Jimmy Zhu, chief strategist, Fullerton Markets.

G-bits Network Technology Xiamen fell 1.9 per cent to 120.03 yuan, Shanghai East-China computer fell 3.2 per cent to 19.08 yuan and Shanghai Weaver Network lost 2.6 per cent to HK$84.61. Guangdong Super Telecom dropped 3 per cent to 2.46 yuan.

China plans to reduce the average tariff rate on imports from most of its trading partners as soon as October, Bloomberg News reported, in line with Beijing’s pledge to its trading partners that it would take measures to further increase imports.

Liquidity in the financial system remains accommodative, after the People’s Bank of China on Monday unexpectedly lent 265 billion yuan (US$38.58 billion) to banks via its one-year medium-term lending facility.