Chinese shares down on probe into margin trading

China stocks had their worst weekly performance in over a year this week, with the sentiment hit by investigations into margin trading.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 47.41 points or 1.4 per cent, to 3,434.39, while the Shanghai Composite Index, which tracks all the tickers trading on the Shanghai Stock Exchange, lost 50.6 points or 1.6 per cent to 3,210.36.

The CSI300 ended the month of January down 2.8 per cent, marking its worst monthly performance since February last year.

The China Securities Regulatory Commission (CSRC) is investigating the margin trading business of 46 companies, the official Xinhua news agency had said on Thursday, in its latest efforts to rein in speculation.

“It is clear that the government wants a steadily rising stock market, not a surging one fuelled by debt,’’ Bank of America Merrill Lynch Global Research wrote in a report.

“It seems to us that CSRC has been trying to walk a tightrope to achieve a difficult balance: to warn investors enough, but not to hurt them too much (so they dump stocks).’’

The largest percentage gainer on the Shanghai exchange on Friday was High Hope, which rose 10.0 per cent, while the largest percentage decliner was China Software, down 9.1 per cent.

Among the most active stocks in Shanghai were Bank of China, up 0.23 per cent at 4.41 yuan; GD Power, down 2.43 per cent at 4.01 yuan; and China Petroleum, down 1.95 per cent at 6.04 yuan.

In Shenzhen, Jilin Power, up 8.9 per cent at 5.26 yuan; TCL Corp, up 1.8 per cent at 3.89 yuan; and Biocause, down 9.9 per cent at 8.26 yuan, were among the most actively traded.

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