Chinese markets end mixed on weakened volume

Tracy Li
Consumption stocks picked up ahead of the approaching holidays, while real estate and related sectors were a major drag.
Tracy Li

China’s A-share markets posted mixed results on Friday as trading volume on the two main bourses continued to shrink.

The benchmark Shanghai Composite Index shed 0.12 percent to close at 3,215.42 points, with property developers a major drag.

The smaller Shenzhen Component Index dropped 0.02 percent to finish at 12,814.17 points, while the ChiNext Index rose 0.18 percent to 2,540.43points.

Volume on the two main bourses was 569.4 billion yuan (US$83.5billion), compared with 679.3 billion yuan in the previous session.

Affected by rumors of Evergrande's debt, most real estate stocks fell. Building material and architectural decoration companies also lost steam.

However, as the Mid-Autumn Festival and National Day holiday are approaching, the consumption sector picked up and military stocks also strengthened, which helped the Shanghai Composite narrow losses.

Regulators recently tightened supervision on insider trading and other offenses, and thus some short-term hot money may temporarily withdraw from the market, Wang Chen, an analyst at Sinolink Securities, told Caixin.

FTSE Russell, a global multi-asset index provider, has announced that Chinese government bonds will be included into its flagship World Government Bond Index from October 2021, according to media reports.

The move reflects the affirmation of overseas investors on the continuous improvement and accelerated opening of China's bond market and their confidence in the sustained recovery of China's economy, said Zhang Jinqiu, vice president of HSBC Bank (China) and co-director of its Global Capital Markets.

HSBC expects that the inclusion will attract about US$150 billion of overseas funds into China's bond market.

In the long run, Chinese bonds will play an increasingly significant role in the international financial market, and will also occupy an increasingly high proportion in the investment portfolio of global investors, the banking giant added.

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