A wave of selling swept through China’s stock market for a second day, with the benchmark gauge tumbling below a key level, as the risk of escalating trade tensions and tighter credit hammered investor confidence.
The Shanghai Composite Index fell 1.4 percent to close below 3,100 for the first time in 10 months, with little sign that state-backed funds attempted to save that level. Technology shares plunged after the U.S. banned ZTE Corp. from buying American tech. New China Life Insurance Co. declined for a fifth day to lead financial shares lower amid ongoing speculation the government will lift deposit caps at banks, leading to higher borrowing costs.
After a strong start to the year, the benchmark gauge has tumbled 14 percent from its January high in the world’s worst performance after the Philippines. The slump threatens to mar China’s inclusion into MSCI Inc. indexes in June, with the Shanghai measure falling to its lowest level relative to MSCI’s global gauge since 2014.
Source : Bloomberg