China stocks fall for fourth day but declines ease, Hong Kong shares up

– World news selected by Gazette editors for Phuket’s international community

PHUKET: China stocks fell for a fourth day on Wednesday but losses were more subdued than earlier in the week after Beijing reiterated its determination to stabilise its wild equity markets.

The CSI300 index fell 0.4 percent to 3,796.77 points at the end of the morning session, while the Shanghai Composite Index lost 0.2 percent to 3,655.27 points.

But China CSI300 stock index futures for August fell 1 percent to 3,646.4, or 150.37 points below the current value of the underlying index, pointing to expectations of further losses despite unprecedented market support measures from Beijing in recent weeks.

Jaw-dropping price swings, rapidly fading confidence in the market and concerns about China’s cooling economy will likely deter investors from returning in the near-term even if shares show signs of stabilising, analysts said.

Stocks have slumped some 30 percent since mid-June, after more than doubling in just six months.

After showing some signs of rebounding in recent weeks, major indexes plunged more than 8 percent on Monday in theirm worst single-day drop since 2007.

“The frequent corrections and sharp falls of the stock market recently have made investors more cautious,” said Du Changchun, an analyst at Northeast Securities in Shanghai.

“They are not keen to buy ‘at the bottom’ nowadays like they did before.”

Margin trading volumes have also declined, taking up 11.7 percent of all trading in the A-share market on Monday, compared to 12.6 percent on Friday and 12.9 percent on Thursday. Much of the sharp run-up had been fueled by investors borrowing money to speculate on stocks, many of whom have since been forced to dump their holdings as their losses deepened.

After Monday’s nosedive, China’s securities regulator pledged to buy shares to calm the market and the central bank hinted at more policy easing to boost liquidity. The China Securities and Regulatory Commission (CSRC) also said it was investigating share dumping “incidents”.

In Hong Kong, the Hang Seng index edged up 0.1 percent to 24,515.80 points.

The Hong Kong China Enterprises Index gained 0.2 percent to 11,198.40.

The index measuring price differences between dual-listed companies in Shanghai and Hong Kong stood at 136.47.

A value above 100 indicates Shanghai shares are pricing at a premium to shares in the same company trading in Hong Kong, and vice versa.

The northbound quota for the Hong Kong-Shanghai Stock Connect, currently set at 13 billion yuan, saw net inflows of 0.10 billion yuan.

Total volume of A shares traded in Shanghai was 21.89 billion shares, while Shenzhen volume was 14.97 billion shares.

Total trading volume of companies included in the HSI index was 0.5 billion shares.

($1 = 6.2078 Chinese yuan)

— Phuket Gazette Editors