China stocks tumble over 6%, post biggest 1 day loss in month

Hong Kong stocks opened weaker on Thursday following a volatile trading session on U.S. markets Wednesday, where shares rebounded from sharp loses to end modestly higher.

Hong Kong’s Hang Seng index fell 303.70 points or 1.58 percent to 18,888.75 as the Chinese yuan fell for a fifth day and surging money market rates in China signaled tighter liquidity.

The Shanghai Composite Index slid 1.1 percent to 2,897.53 at 9:52 a.m., led by technology and industrial companies.

The Shanghai index has gained 10 percent from a low in January, boosted by liquidity injections by the central bank, the government’s effort to support the housing sector, a key driver of the economy, and the replacement of the head of China’s top securities regulator.

Further damping sentiment is the looming IPO reform, which could start as soon as next month.

“The upcoming registration system would increase stock supply and hit valuation of listed companies”, said David Dai, Shanghai-based investor director at Nanhai Fund Management Co.

Small-caps were among the biggest casualties on the mainland, with Shenzhen’s start-up board ChiNext .CHINEXC slumping 5.7 percent.

The G20 central bankers and finance ministers will concentrate on topics including global growth, infrastructure investment, the reform of global financial governance, restructuring of sovereign debt, global tax cooperation and the financing of environmental programs, according to Xinhua.