HONG KONG: China’s benchmark equity index fluctuated on the brink of a bear market yesterday despite efforts by state media to bolster investor confidence shaken by concerns over Beijing’s escalating regulatory crackdown.
The CSI 300 Index fell as much as 1.8% before erasing the decline to briefly trade higher, with the gauge teetering near a 20% decline from a February peak.
In Hong Kong the Hang Seng Index fluctuated after initially being lifted by a rebound in Meituan, which saw its stock hammered earlier in the week following China’s new regulations on the food delivery sector. The Hang Seng Tech Index rose 0.8%, set for its first gain in four sessions.
State media sought to talk up the market after a wave of selling that saw nearly US$1.5 trillion (RM6.35 trillion) of market value wiped off Hong Kong and mainland shares since last Thursday, according to Bloomberg-compiled data. Investors have dumped stocks in the crosshairs of Bejing’s sweeping regulatory crackdowns, in a selloff that also spread to bond and currency markets Tuesday.
Recent declines are unsustainable and the market will stabilise quickly, the Securities Daily reported, citing fund managers.
The recent slump has “to an extent, reflected the misreading of policies and venting of sentiment by some funds,” wrote the Securities Times in a front-page editorial, adding that economic fundamentals were unchanged and the market might stabilise at any time.
The jawboning followed dramatic market moves that underscored the fragility of investor confidence amid a months-long regulatory onslaught by Beijing.
Traders fear the latest crackdown on the nation’s education, food delivery and property sectors could expand to other industries such as healthcare, as China looks to tighten its grip on Big Tech and reduce the wealth gap. The government has targeted private enterprises it blames for exacerbating inequality and increasing financial risk.
Elsewhere, the China Securities Journal echoed other publications in saying there was no systemic risk, adding that there was no need for investors to be overly pessimistic. ― Bloomberg