INSUBCONTINENT EXCLUSIVE:
HONG KONG: Chinese shares marked their lowest close in four years on Thursday, dragged down by Sinopec which fell after Reuters reported
that the state-owned oil giant had suspended two top executives at its trading arm
The Shanghai Composite index fell 0.6 per cent to 2,483.09 points, while the blue-chip CSI300 index was down 0.4 per cent
The Shanghai stock index marked its lowest close since November 2014
The index now sits below both its 50-day moving average and its 100-day moving average.
The CSI 300's financial sector sub-index slid 0.1
per cent, the healthcare sub-index was down 0.9 per cent, while the smaller Shenzhen index ended down 1.2 per cent, and the start-up board
ChiNext Composite index gave up 1.3 per cent
Sinopec, officially known as China Petroleum Chemical Corp, suspended two top officials for inflicting severe losses in trading, Reuters
Shares of the company, which is Asia's largest refiner, dropped after the news broke and closed down 6.8 per cent in Shanghai and 4 per
cent lower in Hong Kong.
"This came as a bit of a shock to the market," said Zhang Gang, a Shanghai-based analyst at Central Securities
"It is still very unclear what might happen next at the company."
The sudden suspensions erased the optimism in the morning session, when
expectations of policy support and buoyant global stock markets led local stocks higher
Instead, investors took stock of fresh data reporting China's first fall in industrial profits in three years.
Oil prices, which rallied and
supported global shares previously, did a U-turn on Thursday amid worries over a glut in crude supply and concerns over a faltering global
economy.
Sentiment in the Chinese market remains fickle and confidence is lacking, Zhao Wei, an analyst at Founder Securities, another local
brokerage, wrote on Thursday
But the risk of pledged shares, which prompted authorities to intervene in October, will give the market some support at key levels
Zhang also sees the Shanghai index finding some support around 2,500 points before the New Year, but "it is hard to see if that will remain
the case after that, especially if there are more black swan events" like the Sinopec suspensions.
At 07:22 GMT, the yuan was quoted at
6.8938 per US dollar, 0.13 per cent weaker than the previous close of 6.8848.
The largest per centage losses in the Shanghai index were
Suzhou Keda Technology Co Ltd and Jiangsu Holly Corp , both down 10 per cent, and Nanjing Textiles Import Export Corp Ltd, which lost 9.2
So far this year, the Shanghai stock index is down 24.9 per cent, the CSI300 has fallen 25.8 per cent
