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China: Stocks fall sharply at open despite cut to banks' reserve ratio
[SHANGHAI] China's stocks fell sharply at the open on Monday despite Beijing's weekend announcement that it will slash the level of cash that banks must hold as reserves, a sign of underlying investor anxiety over a heated US-China trade war.
The early trade also presented the first chance for mainland investors returning from a week-long holiday break to react to the escalating trade tensions and a selloff in Hong Kong markets last week.
On Sunday, the People's Bank of China (PBOC) announced a 100-basis-point cut to reserve requirement ratio, stepping up efforts to support the economy and calm market worries.
The blue-chip CSI300 index was down 2.3 per cent at the open, while the Shanghai Composite Index dropped 1.9 per cent.
Hong Kong's Hang Seng slumped 4.4 per cent last week as investors worried about the escalating trade row between the United States and China.
Last week, US Vice-President Mike Pence intensified Washington's pressure campaign against Beijing by accusing China of "malign" efforts to undermine President Donald Trump ahead of next month's congressional elections and reckless military actions in the South China Sea.
And on Friday, Chinese technology stocks listed in Hong Kong, including Lenovo and ZTE Corp, slumped on a Bloomberg report that the systems of multiple US companies had been compromised by malicious computer chips inserted by Chinese spies.
China's IT sector fell sharply on Monday, tumbling over 3 per cent in early trading. Shenzhen-listed shares of ZTE tumbled over 8 per cent at market open, before recovering some losses.