A-share markets plummet, led by tech stocks

China’s A-share markets recorded heavy losses on Tuesday, with technology, national defense and communications companies among the biggest losers.

The benchmark Shanghai Composite Index shed 1.74 percent to finish at 2,978.12 points after a lower opening.

The smaller Shenzhen Component Index declined by 1.97 percent to close at 9,722.80 points, while the ChiNext Index tumbled by 2.12 percent to finish at 1,677.99 points.

Combined turnover on the two bourses came to 585.9 billion yuan (US$82.6 billion), compared with the previous trading day’s volume of 581.3 billion yuan.

Shares of Joyware, a leading video surveillance solution provider based in Hangzhou, Zhejiang Province, fell by the daily cap of 10 percent to close at 10.88 yuan per share.

Upon invitation from the US side, Liao Min, deputy director of the Office of the Central Commission for Financial and Economic Affairs and vice Finance Minister, plans to lead a delegation to visit the US on Wednesday for trade consultations, according to a report from Xinhua news agency.

The visit will pave the way for the 13th round of Sino-US high-level economic and trade consultations in October in Washington.

On Tuesday, China's central bank pumped 200 billion yuan of funds into the market via the medium-term lending facility (MLF) to maintain liquidity. The funds will mature in one year with an interest rate of 3.3 percent, according to the People's Bank of China. And 265 billion yuan of MLF loans matured on the same day.

Introduced in 2014, the MLF tool aims to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank using securities as collateral.

Against the background of interest rate cuts around the globe by central banks, the market holds some expectations for the PBOC to reduce its lending reference rate, that is, the one-year loan prime rate (LPR) quotation by lowering the MLF interest rate, analysts said. Investors’ sentiment was dented by Tuesday’s move, as it kept the interest rate of MLF loans unchanged.

Last month, China announced it will lower LPR through a new market-oriented pricing mechanism. LPR is the average of the rates banks charge their biggest clients and it is based upon the rate of MLF, which is the cost for banks to borrow from the PBOC.