BEIJING: Chinese stocks tumbled the most in five years, led by brokerages and regulators’ measures to rein in record margin lending flashed worries that speculative merchants will back off from the world’s best-performing stock market.
The Shanghai Composite Index (SHCOMP) sank 6.3 percent to 3,163.72 at 11:30 a.m. local time, poised for the steepest drop since August 2009. Citic Securities Co. (600030) and Haitong Securities Co., the nation’s two biggest listed securities firms, fell by the 10 percent daily limit after they were suspended from lending money to new equity-trading clients. The stock gauge’s 30-day volatility rose to a five-year high.
The penalties have raised concern that policy makers are trying to curb a surge in stock purchases using borrowed money, after outstanding margin loans surged to 1.08 trillion yuan ($174 billion) as of Jan. 13 from about 400 billion yuan at the end of June. The Shanghai Composite index has jumped 61 percent during the past 12 months on record volumes as individual investors piled into the market.
“Regulators are concerned that shares have run too hard, too fast,” said Hao Hong, a strategist at Bocom International Holdings Co. in Hong Kong. “They want a measured increase in the stock market. After all, margin financing is one of the reasons for people to be bullish on brokerage stocks, and these stocks have run particularly hard.”
The Shanghai gauge advanced 2.8 percent last week, a 10th week of gains that’s the longest winning streak since May 2007, after credit growth expanded and speculation grew the central bank will cut reserve-requirement ratios.
shanghai shares start week with losses 25 june 2018
Hong Kong, (UrduPoint / Pakistan Point News - 25th Jun, 2018 ) :Hong Kong and mainland Chinese stocks fell on...
