China shares suffered their worst daily loss in almost four years on Monday, taking Hong Kong markets lower, with financials hammered on fears that the central bank would keep money tight and economic growth could slow sharply.
Despite money market rates easing for a second-straight session on Monday, mainland investors remained jittery about monetary conditions and braced for disappointment when the People’s Bank of China conducts a scheduled open market operation on Tuesday.
The CSI300 of the top Shanghai and Shenzhen listings plunged 6.2 per cent. The Shanghai Composite Index dived 5.2 per cent as volumes spiked to the highest in about a month. Monday’s losses were their worst since August 31, 2009.
The Hang Seng Index slid 2.2 per cent to 19,814 points, closing below the 20,000-point mark for the first time since September 11. The China Enterprises Index of the leading Chinese listings in Hong Kong tumbled 3.2 per cent to its lowest since October 2011.
At $US10 billion, Hong Kong turnover was off Friday’s three-month high, but was still some 20 per cent more than its average in the last 20 sessions. Short selling accounted for 13.6 per cent of total turnover, versus the 8 per cent historical average.
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