SHANGHAI: China’s main stock indexes fell on Friday, posting their worst day since last December, as investors await fresh evidence of a sustainable recovery in the world’s second-largest economy. The blue-chip CSI300 index and the Shanghai Composite Index both lost around 1 per cent to 3,445.81 points and 3,237.45 points, respectively. For the week, the CSI was up 0.5 per cent, while the SSEC gained 0.8 per cent. China’s central bank on Thursday raised short-term interest rates in what economists said was a bid to stave off capital outflows and keep the yuan currency stable after the raised US rates overnight.
The central bank tried to soothe jitters by saying the interbank rate increase did not point to any change in its monetary policies and was not tantamount to a hike in its benchmark policy rate. But analysts said the rate moves, more of which are expected, will eventually translate into higher borrowing costs for Chinese companies and consumers. For the day, most sectors lost ground, dragged down by material plays and by banking stocks, as higher borrowing costs typically pressure rate-sensitive sectors such as property and banking.
In particular, investors retreated from newly-listed stocks, many of which slumped after surging in past weeks on speculative buying. Still, shares in Baiyin Nonferrous closed up 1.6 per cent in volatile trading. The stock has surpassed China Molybdenum to become the largest listed nonferrous company by market value, after rocketing 574 per cent since its debut trading in mid-February.
