China stocks tumble 3 pct on weak investment data, global woes

Shanghai stocks plunged more than three per cent on Monday, in line with heavy losses across world markets fuelled by worries over the global economy.

The benchmark Hang Seng Index fell 2.54 percent, or 534.29 points, to 20,508.35 by the break.

Investors are returning to exchange-traded funds focused on China and Hong Kong as increasing odds that the Federal Reserve will move slowly in raising USA interest rates stoked demand and traders braced for MSCI Inc.’s decision about whether to add mainland stocks to its benchmark indexes.

Traders also are putting money back into China as MSCI may include some mainland-listed equities in its benchmark indexes.

He said the Shanghai index was still roughly 17 percent above the theoretical support level of 2,500 even after nearly halving from last summer’s peak.

“Although Hong Kong is trying to heal, struggling global markets will be a drag”.

Concerns that Britain may vote to leave the European Union have contributed largely to slumps in the European and US markets last week, according to Shanxi Securities.

Market sentiment was undermined during China’s Dragon Boat Festival holiday as overseas stock markets slumped and the offshore Chinese yuan reached a four-month low versus United States dollar.

“Given today’s data, there is higher risk for China to miss the growth target of 6.5 per cent y/y in Q2”, ANZ wrote in a research note.

The comments marked the first time an official of the securities regulator has spoken out ahead of next week’s review by New York-based MSCI on whether yuan-denominated A shares will be added.

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