Shanghai stocks post the worst weekly performance in 3 months

Shanghai stocks fell on Friday, marking the worst week of the past three months amidst weak industrial figures and tightening liquidity.

The Shanghai Composite Index lost 1.45 percent over the week to 3,382.91 points, which was the largest loss since mid-August. For Friday alone, the index shrank 0.48 percent, notching a four-day decline.

“Over the week, the fact that industrial expansion slowed down last month and interest rates rose over the past few days has dampened investor sentiment,” Chen Jian, investment consultant at Datong Securities said.

The overnight Shanghai Interbank Offered Rate, or Shibor, which measures the cost at which Chinese banks lend to one another, has rebounded to a one-and-half-month high, despite slight drops on Thursday and Friday.

Meanwhile, the price of the most traded 10-year treasury bond contract lost 0.04 percent on Friday, suggesting a rebound in interest rates, Zhao Huan, chief analyst at Fortune Securities said.

He added that although the central bank injected funds into the banking system on Thursday and Friday via reverse repurchase agreements, “investors have been worried about the capital outflows from the stock market.”

Zhongtong Guomai Communication Co, a communications equipment producer, slumped by the daily limit of 10 percent to 46.4 yuan (US$7.0), as did Will Semiconductor Co to 36.78 yuan.