Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Chinese stocks slid the most in five months on Thursday, the day after President Xi Jinping projected his nation’s global ambition with a landmark military parade in Beijing.
The blue-chip CSI 300 benchmark fell 2.5 per cent while Hong Kong’s Hang Seng index dropped more than 1 per cent. China’s tech-heavy STAR 50 index shed more than 5 per cent.
The CSI 300 index surged more than 10 per cent in August, fuelled by the rally in shares of chip designers such as Cambricon. The index is up more than 14 per cent this year, reaching its highest level in over three years.
Market participants saw an opportunity to take profit from the tech rally, said Zhao Jian, head of a research institute at Atlantis Investment, a Hong Kong-based asset management company.
Banking stocks rose, and the so-called national team — an array of institutions that can work together to support the market — was said to be buying financial shares. “The magnitude of the move is a lot larger than usual,” said Wee Khoon Chong, a senior strategist at BNY.
A report on Bloomberg that China’s financial regulators are considering cooling measures for the stock market also sent shares lower, Chong said.
Margin trading — borrowing to purchase stocks — rose to an all-time high on Monday, hitting Rmb2.28tn ($320bn), higher than the record set in 2015, when a sharp rally in the country’s stock market led to a crash. “I don’t think it’s a turning point [of the rally]. It’s not a repeat of 2015,” Chong said,
