Markets close down, investors wary

China’s stock markets closed down on Thursday and combined daily turnover shrank as local investors chose to take a “wait and see” approach as foreign institutional investors sold off.

The Shanghai Composite Index fell 0.92 percent or 27.78 points to finish at 2,994.94. More than 20 shares fell by the daily maximum 10 percent.

The Shenzhen Component Index shed 0.65 percent to 9,546.51 points, while the ChiNext dropped 0.67 percent to 1,626.82 points.

Most sectors fell, with textile and clothing manufacturers, property developers and media companies leading the losses.

Langsha Knitting Co Ltd, the world’s largest hosiery enterprise, based in the eastern province of Zhejiang, dived 5.19 percent to close at 17.72 yuan (US$2.63).

The combined turnover of the two bourses was 663.6 billion yuan, down from 664.7 billion yuan on Wednesday.

Such low transaction volumes have been rarely recorded since the beginning of March, said Kang Chongli, head of the strategy team at Lianxun Securities. 

Monday saw a net outflow of more than 10 billion yuan of foreign capital, which triggered a risk-aversion sentiment among investors. And without abundant capital, it would be very difficult for the market to rise, Kang said.

Premier Li Keqiang said in a speech at the Boao Forum for Asia — Asia's Davos — on Thursday that the country would continue to open up its financial sector.

The banking, securities and insurance industry are speeding up their efforts to liberalize market access for foreign investment.

The business scope for foreign banks will be greatly expanded. And there will be no longer separate restrictions on the business scope of overseas security houses and insurance brokerage companies.

Also, access restrictions on areas such as credit ratings services, bank card clearing and non-bank payment services will be greatly relaxed.