Stocks in Shanghai Plummet
Investors spooked by stake sales of Chinese banks by sovereign-wealth fund
The Shanghai Composite Index fell as much as 6.6% in the afternoon session and closed down 6.5%, after disclosures that Central Huijin Investment Ltd. was selling shares of Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. The stakes involved are tiny—a few percentage points each—but they were enough to send Shanghai reeling by the most since Jan. 19, when the market dropped 7.8%.
“The China market is basically trading like a yo-yo,” said Steve Wang, research director at Reorient Financial. “It’s retail driven, people just follow the trend. It’s literally a roller coaster.”
ICBC was down 3.3% and China Construction Bank fell 5.8% in Shanghai.