Shanghai: China’s main stock market indexes ended a volatile Friday just about where they started it after the previous day’s sharp sell-off that led many to believe the red-hot bull market has paused for a correction.
After a rough start in which the Shanghai Composite Index briefly slid more than 4 per cent, key indexes recovered to bounce in and out of positive territory, and they ended the day mixed.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.1 per cent, to 4,840.83, while the Shanghai Composite Index lost 0.2 per cent, to 4,611.74 points.
During May, the CSI300 was up 1.9 per cent, while the SSEC rose 3.8 per cent.
Shenzhen’s start-up board ChiNext, which fell 4.8 per cent on Thursday, rebounded 3.2 per cent on Friday.
The sell-off on Thursday, which saw turnover in Shanghai set a record at 1.2 trillion yuan ($193.51 billion), was set off by multiple factors, including margin finance tightening moves by brokerages, a central bank move to drain market liquidity and a coming flood of initial public offerings (IPOs).
David Dai, Shanghai-based investment director at Nanhai Fund Management Co Ltd, said they are all excuses for investors to take profit after the market rose “too much and too fast.” “The correction is not yet over,” Dai said.
“Yesterday’s slump was too rapid, so many investors didn’t have time to flee. Many are still seeking exit.” In additional signs of investor caution, Chinese fund managers cut the proportion of their portfolios to be invested in stocks over the next three months on correction concerns, a Reuters poll showed.
