Financial shares drag the market

Huang Yixuan
China stocks retreat from an earlier rally though turnover on the two major bourses expands slightly compared with the previous session.
Huang Yixuan

China stocks retreated on Wednesday from an earlier rally, mainly dragged down by tumbling financial shares.

The benchmark Shanghai Composite Index dropped 0.78 percent to 2,911.05 points. The smaller Shenzhen Component Index fell 0.82 percent to 9,809.05 points, while the blue chip CSI300 index closed 0.99 percent lower at 3,907.86 points.

Turnover on the two major bourses expanded slightly to total 425.96 billion yuan (US$60.53 billion), compared with 418.33 billion yuan in the previous session.

Most industry sectors posted declines, according to data from Wind Information. Stocks of around 2,700 A-share-listed companies fell while fewer than a thousand gained.

Overseas capital, meanwhile, continued to flow into the A-share markets, with the net influx via the stock connect schemes linking the Chinese mainland with Hong Kong reaching 190 million yuan in this session.

The bank sector posted the biggest slump. Industrial Bank Co and Ping An Bank Co both shed over 3 percent. 

China's central bank on Wednesday cut its one-year and five-year Loan Prime Rate (LPR) by 5 basic points, which has been widely expected to reduce the funding costs and bolster the economy.

Among non-bank financial shares, Lakala Payment Co took a nosedive to drop by the daily maximum of 10 percent. Its Kaola Credit subsidiary was accused of illegally caching, selling and distributing users' personal information.

Electronic component shares were also among the biggest decliners, with Holitech Technology Co, XiaMen HongXin Electron-tech Co and Jiangsu Nata Opto-electronic Material Co all losing over 5 percent.

The agriculture, forestry, animal husbandry and fishery sectors, electrical equipment firms, house appliance shares, and communication companies also posted drops.

Stocks related to online gaming, however, extended the increase. Rare earth-related shares also performed strongly.

Among the 55 companies listed on the STAR Market, shares of 10 firms rose, while those of 44 enterprises declined. The stock price of Bloomage Biotechnology Corp remained flat.

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