Shanghai shares tumble 4.4 percent with rare "sell" reports
Shanghai shares tumbled 4.4 percent on Friday, the biggest slump this year, because of rare “sell” reports and weak trade data.
The benchmark Shanghai Composite Index fell 4.4 percent to close at 2,969.86, the biggest drop this year. It also ended below the psychologically important 3,000 line.
Shenzhen's component index dropped 3.25 percent to close at 9,363.72. The GEM, or Growth Enterprise Market, also decreased 2.24 percent to 1,654.49 on Friday.
Though the Shanghai index jumped in the four consecutive trading days, it edged down weekly compared with last Friday's 2994.01.
The trade volume of the Shanghai and Shenzhen markets on Friday still expanded to 1.18 trillion yuan (US$173.1 billion), compared with 1.16 trillion yuan on Thursday.
Finance shares including insurance and securities companies led the fall.
Shanghai-listed PICC, or People’s Insurance Company (Group) of China Ltd, whose share price more than doubled in the past 15 trading days, sank by the 10 percent daily limit to close at 11.55 yuan.
Before that, Citic Securities Co as the China’s biggest securities firm, rated Shanghai-listed PICC “Sell” as “significantly overvalued."
PICC Group’s Hong Kong-listed shares, which trade at a discount of about 74 percent, fell as much as 3.6 percent Friday.
It’s rare to label “sell” ratings in the Chinese market, which is regarded by investors and the market as a signal of over-heating of the market.
Shanghai-listed securities firm CSC Financial Co Ltd slipped the 10 percent daily cap to close at 28.04 yuan. It was rated by Huatai Securities as “sell.”
Also on Friday, Chinese customs data showed that domestic exports and imports were missing analysts’ expectations.
The non-bank finance sector dropped 6.31 percent while steel and metal sectors both fell about 6.5 percent, according to Wind.
Over 200 shares dropped by the 10 percent daily cap on Friday.
Only agriculture, chip and game sectors slightly increased or remained unchanged on Friday.