Shanghai at near 4-yr low

China stocks dropped on Thursday, while the Shanghai Composite index touched its lowest in nearly four years, amid investor concerns about lean domestic growth with the country's premier warning of increasing downward pressure.

At the midday break, the Shanghai Composite index was down 51.00 points or 1.99 per cent at 2,510.62, after touching its lowest since November. 24, 2014. China's blue-chip CSI300 index was down 1.51 per cent, with its financial sector sub-index down by 1.26 per cent, the consumer staples sector slipped 1.48 per cent, the real estate index lost 1.52 per cent and the healthcare sub-index falling 2.5 per cent.

China's economy faces increasing downward pressure, and the government will take targeted measures to prevent large fluctuations in growth, Premier Li Keqiang said. “The market index is already close to its 20-year moving average of 2,450 points, an important support level.

The Shenzhen, small-cap and start-up indexes... are already heavily oversold, so a rebound could happen any time,” analysts at Donghai Securities said in a note. “In a bearish market, market participants tend to ignore good news, and react to bad news,” said a Beijing-based trader, who attributed Thursday's fall to energy stocks' performance, dragged down by falling oil prices.

China's new bank loans rebounded in September after dipping in the two previous months, central bank data showed, but overall credit conditions stayed tight in an economy chilled by an ongoing tariff war with the United States. “The overall falling trend of total social financing growth remains unchanged, and the loosening of the credit situation that the market has been waiting for has not appeared,” analysts at Pingan Securities said in a note.

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