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July 18, 2017

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Shares plunge on calls to curb financial risks

CHINA stocks plunged yesterday with nearly 500 dropping by their daily limit of 10 percent amid officials’ call to dampen speculation and curb financial risks.

The benchmark Shanghai Composite Index shrank 1.43 percent to end at 3,176.5 points, a two-week low.

Shenzhen listed stocks, which feature smaller-cap companies from the technology and consumption sectors, suffered most.

The startup board ChiNext tumbled 5.1 percent to 1,656.43, the lowest since January 2015 and the Shenzhen Composite Index droped 4.3 percent to 1,800.54.

Over 100 startups in the Shenzhen board tumbled by the daily limit of 10 percent following their first-half financial losses that were reported in the past two weeks. This jeopardized the Shanghai market, said Chen Guo, chief strategic analyst at Essence Securities.

Meanwhile investors rushed to drain their capital from the highly-speculative startup sector “after officials reiterated tightening financial regulations” at a national financial conference over the weekend, said Deng Haiqing, chief economist at JZ Securities.

More than 2,800 stocks fell across Chinese markets. Over 1,200 stocks declined by more than 7 percent.

Glarun Technology Co tumbled by the daily limit of 10 percent to 25.38 yuan (US$3.75), as did Zhejiang Shengyang Science and Technology Co to 15.73 yuan.


 

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