Staff of Reuters 3 Minute Read* The HK->Shanghai Connect daily quota was utilized -3.4 percent, while the Shanghai->HK daily quota was used 0.8 percent. The FTSE China A50 is down 1.5%. (Reuters) – SHANGHAI, June 29 – On Tuesday, Chinese equities slumped as investors took profits after a rise, with banking and consumer companies leading the decline. ** By the end of the morning session, the CSI300 index had dropped 1.3 percent to 5,185.65, while the Shanghai Composite Index had dropped 1.0 percent to 3,572.27. On Monday, the blue-chip CSI300 index gained for the fifth straight session, signaling a pullback. ** The CSI300 financials index fell 1.3 percent, while the consumer staples index fell 2.1 percent. As officials attempt to cement a post-COVID-19 economic recovery, China’s central bank stated on Monday that it will make its monetary policy flexible, targeted, and appropriate while keeping interbank liquidity reasonable. China’s economy has made a remarkable comeback from the impact of the COVID-19 epidemic, with Chinese exporters racing ahead to supply global demand, supporting the massive manufacturing sector, but consumer spending has been slow to recover. “The PBOC’s net injection was to normalize liquidity between quarters, and the PBOC would likely return to draining short-term liquidity, but big inflows via the Stock Connect are unsustainable against a rising dollar,” said Yan Kaiwen, an analyst with China Fortune Securities. According to Yan, the bull market for growth stocks is fueled by a lack of liquidity, and any signs of a change in liquidity could cause significant market volatility.** Shares in China’s leading battery maker CATL hit an all-time high after the company extended a battery supply agreement with Tesla Inc until 2025. * According to Refinitiv data, on Tuesday, investors sold a total of 2.6 billion yuan ($402.46 million) worth of A-shares through the Stock Connect, which connects mainland China with Hong Kong. The Hang Seng index fell 0.8 percent to 29,043.02 points, while the Hong Kong China Enterprises Index declined 1.0 percent to 10,754.19. ($1 = 6.4603 Chinese yuan) (Luoyan Liu and Andrew Galbraith contributed reporting; Subhranshu Sahu edited the piece.) Continue reading
