China: Shares post worst monthly loss in 6 years despite govt support steps

[HONG KONG] China stocks fell on Friday and posted their biggest monthly loss in nearly six years, even as Beijing rolled out a series of support measures and promised to step up efforts to bolster the flagging economy.

The Shanghai Composite Index, which tracks all the tickers trading on the Shanghai Stock Exchange, lost 1.1 per cent to end at 3,664.0 points.

It fell 10 per cent for the week and 14.3 per cent for the month.

The CSI300 index rose 0.03 per cent, to 3,816.7.

After more than doubling in a year, China's stock markets fell into a savage correction in mid-June, slumping some 30 per cent. But they are still up some 13 per cent so far this year.

"The market is still in the process of deleveraging and funds are flowing out," said Li Zheming, an analyst at Daton Securities. "Investors become especially sensitive towards the weekend when Beijing usually releases new messages, and that's why they tend to square their positions on Friday." China's securities watchdog said on Friday it was investigating the impact of automated trading on share markets, as authorities step up a crackdown on what they regard as heavy speculative selling that could destabilise the world's second-largest economy.

The ruling Communist Party has enlisted the central bank, the state margin-lender, commercial banks, brokers, fund managers, insurers and pension funds to buy shares, or help fund their purchase, to help stave off a full-blown crash.

The largest percentage gainer on the Shanghai exchange on Friday was Tielong Log, which rose 10 per cent, while the largest percentage decliner was Xinji Energy, down 10 per cent.

Among the most active stocks in Shanghai were Agriculture Bank of China, up 0.88 per cent to 3.44 yuan and Bank of China, down 1.55 per cent to 4.45 yuan.

In Shenzhen, Suning Appliance, up 1.3 per cent to 13.79 yuan and Myhome, down 4.5 per cent to 5.26 yuan, were among the most actively traded.

REUTERS