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China: Stocks reverse gains amid widening corruption probe
[SHANGHAI] China stocks dropped two per cent on Thursday, with a dive in the last 30 minutes of trade wiping out early gains, underscoring fragility of investor sentiment as Beijing's anti-corruption crackdown extends deeper into the financial industry.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 2.2 per cent, to 3,237.00, while the Shanghai Composite Index lost 2.1 per cent, to 3,086.06 points.
Late on Wednesday, China announced a probe into the assistant chairman of China's securities regulator, a day after CITIC Securities said several senior executives, including its general manager, were being investigated. "Anti-corruption is good for the market in the long term,"said Samuel Chien, a partner of Shanghai-based hedge fund manager BoomTrend Investment Management Co. "In the short term, the market will likely be range-bound as investors watch what would happen next." All main sectors fell.
The only bright spot were shares of Chinese software makers, big-data companies and firms in the business of Internet security.
Such stocks rose as investors bet President Xi Jinping's visit to Washington next week would put the spotlight on the two powers' tensions over cyber-security issues, creating thematic investment opportunities.