Chinese shares suffered their worst week in more than seven years on Friday, as both the Shanghai and Shenzhen markets fell into correction territory amid rising fears of a bubble in China’s volatile equity markets
Markets elsewhere in Asia rose, tracking gains in the U.S. a day after the Federal Reserve signaled it would move more slowly on raising interest rates.
In Tokyo, the Nikkei 225 index regained 183.42 points, or 0.9% to 20,174.24
In Hong Kong, the Hang Seng Index recovered 65.87 points, or 0.3%, to 26,760.53.
CHINA
The Shanghai CSI 300 dropped 293.50 points, or 6%, to 4,637.05
The losses are a blow to one of the world’s best performing markets this year and the efforts of Chinese regulators to coax a steady, sustainable rise in stocks.
Worries of high valuations and record levels of margin debt have sparked intermittent selling in the market, although coupled with the prospect of more companies listing in Shanghai and Shenzhen, the magnitude of losses has surged in recent weeks.
While analysts have been reluctant to call a bottom for the selling, they say that volatility in Shanghai, now four times what it was a year ago, is expected to persist. Investors pulled out $2.1 billion U.S. from Chinese stock funds in the week ending Wednesday, after $7.1 billion U.S. in outflows the previous week, according to the latest data from ANZ Bank.
Some analysts now think Beijing is more likely to step in with further stimulus, helping prop up the markets. Since November, the People’s Bank of China has cut interest rates three times and banks’ reserve requirement ratios twice.
In other markets
Markets in Taiwan were closed for holiday
In Korea, the Kospi index gained 5.08 points, or 0.3%, to 2,046.96
In Singapore, the Straits Times Index inched up 0.54 points to 3,300.96
The NZX 50 gained 32.06 points, or 0.6%, to 5,781.76
The ASX 200 Index regained 72.10 points, or 1.3%, to 5,596.99
