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China Traders, Insiders and Foreigners Are All Fleeing Stocks
Bloomberg News, Bloomberg News
(Bloomberg) -- Sentiment in China’s equity market worsened amid the biggest threat to diplomatic ties with Washington in years.
The CSI 300 Index fell 3.9% after the Chinese Foreign Ministry said it ordered the U.S. to close its consulate in the southwestern city of Chengdu. The ChiNext Index lost 5.5%, and the yuan touched its lowest in two weeks. China’s defense stocks rose.
The move came days after the Trump administration abruptly ordered the closure of a Chinese consulate in Houston. The escalation in tensions comes at a particularly volatile time for Chinese stocks, with the government taking steps to manage a debt-fueled frenzy that had pushed benchmarks to their highest since 2015. While bullish traders have pushed leverage to an almost five-year high, insiders at China’s tech startups announced plans to sell as soon as they could.
“Worries over China-U.S. relations will dominate the market,” said Raymond Chen, a portfolio manager with Keywise Capital Management (HK) Ltd. “People will be closely watching how the U.S. reacts to the closure of Chengdu consulate. I expect more panic selloff in the near term.”
Overseas investors dumped a net 12.6 billion yuan of Chinese shares in Friday’s morning session, the most since July 14 when they net sold a record 17.4 billion yuan.
©2020 Bloomberg L.P.
China Traders, Insiders and Foreigners Are All Fleeing Stocks
Bloomberg News, Bloomberg News
(Bloomberg) -- Sentiment in China’s equity market worsened amid the biggest threat to diplomatic ties with Washington in years.
The CSI 300 Index fell 3.9% after the Chinese Foreign Ministry said it ordered the U.S. to close its consulate in the southwestern city of Chengdu. The ChiNext Index lost 5.5%, and the yuan touched its lowest in two weeks. China’s defense stocks rose.
The move came days after the Trump administration abruptly ordered the closure of a Chinese consulate in Houston. The escalation in tensions comes at a particularly volatile time for Chinese stocks, with the government taking steps to manage a debt-fueled frenzy that had pushed benchmarks to their highest since 2015. While bullish traders have pushed leverage to an almost five-year high, insiders at China’s tech startups announced plans to sell as soon as they could.
“Worries over China-U.S. relations will dominate the market,” said Raymond Chen, a portfolio manager with Keywise Capital Management (HK) Ltd. “People will be closely watching how the U.S. reacts to the closure of Chengdu consulate. I expect more panic selloff in the near term.”
Overseas investors dumped a net 12.6 billion yuan of Chinese shares in Friday’s morning session, the most since July 14 when they net sold a record 17.4 billion yuan.
©2020 Bloomberg L.P.
