Losses continued to mount for China’s tech-focused ChiNext index on Tuesday, sending it to the lowest level in two and a half years as concerns over tighter financial regulations continued to undercut confidence in small-cap stocks – as well as Chinese equities generally.
The ChiNext, which is home to many technology companies, was off another 0.8 per cent at the end of the morning session. Among the biggest contributors to Tuesday’s drop were financial data provider Hithink RoyalFlush, down 8.3 per cent, and meat products company Guangdong Wens Foodstuffs, off 2.5 per cent.
Combined with Monday’s close down 5.1 per cent , the largest daily fall since mid-December, the Tuesday morning drop brought the index 5.9 per cent lower for the week to date. At 1,643.14 the index was at its lowest level since January 20, 2015.
The downturn comes after the once-in-five-years National Financial Work Conference held in China over the weekend, at which Xi Jinping called on state-owned enterprises to lower their debt levels and said the country’s financial officials must “get a grip” on “zombie” companies kept alive by infusions of cheap credit.
Mainland-listed stocks were faring badly more generally on Tuesday, with the Shanghai Composite index down 0.6 per cent and the Shenzhen Composite off 0.7 per cent. In Hong Kong the Hang Seng China Enterprises index was down 0.5 per cent.