CHINA STOCKS SINK, LOSSES HIT INVESTORS FOR 5TH STRAIGHT WEEK
China’s stocks slumped, with the benchmark gauge capping its longest weekly losing streak since early 2016, after US equities tumbled and high-level Sino-American talks in Alaska descended into bickering and recriminations, Jeanny Yu, April Ma and Amy Li reported for Bloomberg News.
The CSI 300 Index slipped 2.6% on Friday, the most since March 8, driven by declines in materials and consumer staples shares. High-value names such as liquor makers Kweichow Moutai Co. and Wuliangye Yibin Co. were among the biggest drags on the gauge, which completed a fifth week of losses.
The slide in China stocks came amid broad weakness in Asian equities after benchmark 10-year Treasury yields touched the highest level since January 2020 on Thursday.
The first high-level talks between the US and China since President Joe Biden took office saw each side sharply criticizing the other over human rights, trade and international alliances at the meeting in frozen Anchorage, Alaska.
“There is definitely a flavor of panic after what looks like a tough stance from both sides and what will happen in terms of trade is now the greatest uncertainty or risk,” said Li Shiyu, managing director at Guangdong Xiaoyu Investment Management Co. “I wouldn’t rule out a blow on stocks similar to what we saw in 2018-2019.”
The latest rout in China’s stocks has been triggered by worries over lofty valuations and possible monetary tightening, with state-backed funds stepping in to stabilize the market. After entering a technical correction last week, the CSI 300 pierced through its key 5,000 support line Friday afternoon before bouncing back, and a measure of 30-day volatility on the gauge is hovering near the highest since August last year.
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