MARKETS-CHINA China stocks continue slide despite calming efforts

Record ID: 149123

  • Title: MARKETS-CHINA China stocks continue slide despite calming efforts
  • Date: 29th June 2015
  • Summary: SHANGHAI, CHINA (JUNE 29, 2015) (REUTERS) INVESTORS INSIDE STOCK EXCHANGE STOCK INFORMATION ON SCREEN INVESTOR LOOKING AT STOCK INFORMATION ON SCREEN INVESTOR'S HAND TYPING ON KEYBOARD STOCK INFORMATION ON SCREEN INVESTORS INSIDE STOCK EXCHANGE INVESTORS LOOKING ON VARIOUS OF SCREEN SHOWING STOCK INFORMATION INVESTORS INSIDE STOCK EXCHANGE VARIOUS OF SCREEN SHOWING STOCK I
  • Embargoed: 14th July 2015 13:00
  • Keywords:
  • Location: China
  • Country: China
  • Topics: General
  • Reuters ID: LVAD8HUG2JM08800F0DHSG9SQMNN
  • Aspect Ratio: 16:9
  • Story Text: China's stock markets closed sharply lower on Monday (June 29) after a volatile day of trading, despite surprise monetary easing moves by the central bank at the weekend.
    The People's Bank of China had said one of the goals of Saturday's (June 27) decision to cut both lending rates and reserve requirements at some banks was to stabilise stock market fluctuations, but Monday's trade saw wild swings.
    The chaotic trading day was an uncomfortable backdrop for policymakers in Beijing, where delegates from 57 countries gathered to witness the signing of the articles of agreement for a Chinese-led development bank, which is expected to rival institutions such as the World Bank and the Asian Development Bank.
    At one point in the early afternoon the CSI300 index of the largest listed firms in Shanghai and Shenzhen was down over 7 percent, but less than an hour later it had recovered almost completely and crossed back into positive territory, leading to speculation that state-owned asset management companies had intervened to prop up the market at the last minute.
    Even so, the CSI300 index closed down 3.3 percent at 4,191.55 points, while the Shanghai Composite Index lost 3.3 percent to 4,054.86 points, falling below its 100-day moving average for the first time since the rally began in the third quarter of 2014.
    Market analysts blamed the destabilising influence of leverage in the market for the enduring weakness, aggravated by a lack of economic data to support a rally that had seen major indexes rise as much as 150 percent by early June.
    Stefan Hofer, Chief Investment Adviser at Asia BNP Paribas, said that despite the market fluctuations, the yuan is sure to remain stable.
    "Well I think it's important not to lose sight of it, it's also the behaviour of the RMB. The RMB has been nice and calm, very stable and actually is an oasis of calm really in a market that around it has become increasingly complex and more volatile. So broadly speaking if we think about the whole package of Chinese assets and capital markets overall - yes, there's equity market volatility but have a look at the currency, which is extremely stable," said Hofer.
    Hong Kong markets also dropped over 2 percent, with investors running for cover, worried that Greece might default in the middle of a Chinese stock market rout, amplifying the downside.
    The Hang Seng index fell 2.6 percent, to 25,966.98, while the China Enterprises Index lost 3.0 percent, to 12,694.66 points.
    Hong Kong stocks took cues from sluggish global markets, as investors moved toward safe haven currencies and assets on Monday as Athens faced a debt default.
    The sudden collapse of mainland equity markets has wiped a combined 16.35 trillion yuan ($2.63 trillion) off market capitalisation - more than the GDP of Brazil - since a June 12 peak, dealing substantial damage to retail investors' confidence in just a few short weeks.
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