Shares slide on concerns of tightening liquidity for banks

Chinese mainland stocks fell on Wednesday due to worries over tightening liquidity in the domestic banking system, and uncertainty over whether US President Donald Trump will be able to get his economic policies approved in a timely fashion.

The blue- chip CSI 300 index fell 0.47 percent to 3,450.05 points.

The benchmark Shanghai Composite Index lost 0.50 percent to 3,245.22 points, while the Shenzhen Component Index closed 0.31 percent lower at 10,553.53 points.

ChiNext, the country’s NASDAQ equivalent, declined 0.64 percent to 1,948.58 points.

“Investors are taking a review of the global economic recovery, as Trump fails to put forward specific figures on his tax cut policies and infrastructure plans,” said Linus Yip, strategist at First Shanghai Securities.

On Tuesday, both the S& P 500 and the Dow Jones Industrial Average booked their biggest one- day slide since before Trump’s election victory in November on concerns over his capability to deliver promised corporate tax cuts.

Investors were also concerned about tightening liquidity in the banking system as the end of the quarter nears, according to Zhang Qi, an analyst at Haitong Securities.

Short- term interest rates surged on Tuesday as cash conditions tightened on worries the central bank’s quarterly risk assessment would restrict lending in the interbank market.

Sectors fell across the board, led by banks and property stocks, as a central bank survey found that 52.2 percent of urban households believed housing prices were “unacceptably high” in the first quarter.

That reinforced expectations authorities will be more aggressive to cool a red- hot property market, even at the risk of dampening economic growth.