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China shares have biggest daily plunge in nearly 4 years

The Shanghai financial sub-index plummeted 7.3 percent in its worst day since November 2008.

Written by PTI | Hong Kong |
June 24, 2013 12:52:04 pm

China shares suffered their biggest daily loss since August 2009 on Monday,with financials hammered on worries that the central bank would keep money tight and economic growth could slow sharply.

The CSI300 of the leading Shanghai and Shenzhen A-share listings ended down 6.3 percent at 2,171.2 points. The Shanghai Composite Index dived 5.3 percent. This was their respective worst daily losses since August 31,2009.

The Shanghai financial sub-index plummeted 7.3 percent in its worst day since November 2008.

Among the biggest losers were smaller banks seen as more reliant on short-term interbank funding,such as China Minsheng Bank,Industrial Bank and Ping An Bank . The People’s Bank of China commented late Monday morning that liquidity in the country’s financial system was “reasonable”,repeating a line from a Sunday commentary in the official Xinhua news agency.

The commentary also said the latest spike in money market rates was a result of market distortions caused by widespread speculative trading and shadow financing. The central bank,in its quarterly report on Sunday,pledged to “fine tune” existing “prudent” monetary policy.

Monday’s slide came despite the overnight repo rate ,a key gauge of liquidity in China’s interbank market,falling by 193 basis points to 7.32 percent on a weighted-average basis on Monday morning,its lowest since last Tuesday.

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