Shares tumble to a six-month low

By Leng Cheng | 17:13 UTC+8 May 8, 2017 |

Online Edition

SHANGHAI shares extended falls to its lowest level since October today, as investors concerned about market liquidity amid tightening regulations on financial risks.

The Shanghai Composite Index decreased 0.78 percent to 3,078.61 points at close, extending its loss of 1.23 percent last week. The Shanghai gauge dropped for four trading days in a row by Friday, in line with a diving commodity price triggered by credit tightening.

"Investors' appetite is turning more cautious mainly driven by intensified regulatory efforts to constrain the growth of leverage," Wang Delun, analysts from Industry Securities Co, said in a report today.

China's money market is facing a credit crunch recently, as China’s central bank draining cash from the banking system to defuse asset bubbles that are build up by previous loosing credit policies. Short-term lending rates have risen to their highest in two years.

The China Insurance Regulatory Commission (CIRC) said in a recent announcement that to plug the loopholes. It banned Anbang Life Insurance, a unit of Anbang Group, from issuing new products for three months in bid to crack down insurance funds that invest heavily into the stock market.

Finance

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Shares tumble to a six-month low

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