Thursday, 20 August 2015 12:47
SHANGHAI: China’s benchmark stock index closed down 3.42 percent on Thursday as worries persisted over the weak economy and currency, dealers said.
The Shanghai Composite Index slumped 129.82 points to 3,664.29 on turnover of 501.2 billion yuan ($ 78.4 billion).
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, dropped 3.00 percent, or 66.56 points, to 2,155.49 on turnover of 480.9 billion yuan.
Chinese shares have been highly volatile in recent months, plunging almost a third in a matter of weeks in June, after having risen over 150 percent in the preceding year.
After the collapse, Beijing intervened with a rescue package that included funding the state-backed China Securities Finance Corp. (CSF) to buy stocks on behalf of the government.
“More investors may be taking the opportunity of state buying to unload their holdings, as growth prospects for China are looking dimmer,” Bernard Aw, a Singapore-based strategist at IG Asia, told Bloomberg News.
A surprise currency devaluation last week has also raised suspicions that China’s economy could be performing worse than expected.
Shanghai stocks closed up 1.23 percent on Wednesday, erasing a more than five percent plunge in morning trade on expectations of fresh government support for the market.
Investors are watching the 3,500 point mark to see if Beijing will intervene hold the benchmark above that point.
“All eyes are focused on whether the government will shore up the 3,500 level,” Nelson Yan, chief investment officer at the Hong Kong unit of Changjiang Securities, told Bloomberg.
“Any inaction could trigger a new round of selling.”
