China shares slump as investor concerns linger
Stocks in China fell on Tuesday after the country’s blue-chip index posted its strongest rally in nearly three years on Monday, as investor concerns about the economy and risks posed by shares pledged for loans continued to hamper sentiment.
The benchmark Shanghai Composite Index was down 2.26 percent, ending at 2,594.83 points. The Shenzhen Component Index closed 2.24 percent lower at 7,574.99 points.
China’s blue-chip CSI300 index was down 2.66 percent to close at 3,183.43 points.
“The economy has yet to see improvement at the margins, so the significant rebound in Ashares on Friday and Monday was mainly driven by improved investor risk sentiment,” analysts at China Fortune Securities said in a note.
“After two days of letting (negative) sentiment drain off, prices will slowly return to reasonable levels. Finding a bottom is still the fundamental theme,” the note said.
Despite a broader weakness, shares in securities firms continued to rise as investors expect support from regulators to benefit brokerages.
The Hang Seng Index was sharply down 3.08 percent at 25,346.551.
So far this year, the Shanghai stock index is down 19.72 percent, while China’s H-share index has lost 10.4 percent.