INSUBCONTINENT EXCLUSIVE:
HONG KONG: China's benchmark Shanghai Composite Index dived to near four-year lows on Thursday, joining a global equities rout after a
tech sell-off battered Wall Street overnight.
Investors sold across the board amid a confluence of factors, including rising interest rates
in the United States, a heated Sino-United States trade battle as well as IMF warnings about global financial stability and growth
risks.
The Shanghai Composite slumped more than 6 per cent before recouping some ground to end the day down 5.22 per cent at 2,583.46
points, levels not touched since Nov
It was the index's worst day since Feb
25, 2016.
The blue-chip CSI300 index, meanwhile, tumbled 4.8 per cent to 3,124.11 points, its lowest level since July 2016.
Steven Leung,
sales director at brokerage UOB Kay Hian, said the impact of the United States equity sell-off and trade war concerns were weighing on
stocks and would endure across Asia.
"We haven't really seen such a big downturn in United States stocks for quite some time
Markets are not sure how long this will continue for," he said.
"The market is also worried that United States -China relations will get
even worse."
In Hong Kong, the Hang Seng Index was off about 3.9 per cent at 0710 GMT.
Tech stocks, which were caught in the trade war
crossfire last week, suffered again on Thursday
Companies including HNA Technology, TDG Holding, and Yihua Lifestyle Technology, down by the daily maximum of 10 per cent.
The smaller
Shenzhen index was down 6.45 per cent and the start-up board ChiNext Composite index was weaker by 6.3 per cent.
"Unless you withdraw from
stocks entirely, you'd want to go for more defensive stocks, like public utilities," Leung said.
Shares in infrastructure firms from China's
west bucked the down trend
The shares rallied after Chinese President Xi Jinping called for the launch of the planning and construction of the Sichuan-Tibet
railway.
Stock of Tibet Tianlu, principally engaged in construction and mineral exploration, jumped near 7 per cent.
One Shanghai-based
trader expects the market will find some support given it has been losing altitude over several months, while United States stocks are
falling from a high point.
"Fund managers will find certain stocks very cheap," he said.
However, there are risk factors for mainland stocks
as a China-United States trade war continues to hurt the revenues of exporters, which will in turn weigh on the major indices, he
added.
The index measuring price differences between dual-listed companies in Shanghai and Hong Kong stood at 123.
A value above 100
indicates Shanghai shares are pricing at a premium to shares in the same company trading in Hong Kong, and vice versa.
There was net selling
of mainland shares to the tune of about 3.5 billion yuan through the connect scheme linking Hong Kong and Chinese markets.
Elsewhere in
Greater China, the Taiwan SE Weighted Index losing over 6 per cent and falling below 10,000 points.
There is room for further losses, said
Bor Yi Chien, Vice President at the Consulting Department of Cathay Futures.
"We can't see where the bottom point will be; we are looking at
We will first see if the 10,000 threshold will be able to be propped up
With a fall like today, not many people will be brave enough to come close to the market."
