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Chinese shares slid on Thursday after state media reported that banks were investigating their exposure to the stock market from wealth management products and loans collateralised with stocks.
The CSI300 index fell 0.2 per cent to 3,923.06 points at the end of the morning session, while the Shanghai Composite Index edged down 0.04 per cent to 3,787.49 points. Trading was subdued after Beijing reiterated this week its determination to stabilise its equity markets.
“The market has been struggling to hover above the water with investors taking to the sidelines to see if stability can be maintained in the market,’’ said Ben Kwong, a director at KGI Asia in Hong Kong.
"People are not in a rush but need more time to build up their confidence in the cautious market," Kwong added.
The China Securities Journal, citing unidentified bank officials, said on Thursday that Chinese banks had been checking their exposure to the stock market. It cited one bank executive saying the lender's headquarters had started investigations in late June. China's stock market rout began in mid-June.
China CSI300 stock index futures for August rose 0.4 percent, to 3,768.4, 154.66 points below the current value of the underlying index.
The Hang Seng Index edged down 0.1 per cent to 24,602.02 points, tracking China indexes and ignoring strength in regional markets after the US Federal Reserve painted a relatively bright picture of the world’s largest economy.
The Hong Kong China Enterprises Index lost 0.5 per cent to 11,213.36.
Depsite the softer tone, China home grown sports brand ANTA Sports outpaced the main index with shares hitting a new high, extending its recent strength after brokers’ upgrades. The stocks trimmed gains but still rose 4.6 per cent by the lunch break. ANTA is due to announce its interim results next week.
Smaller rivals Li Ning gained 3.8 per cent and 361 Degrees climbed 4.6 per cent.
The index measuring price differences between dual-listed companies in Shanghai and Hong Kong stood at 137.93.
A value above 100 indicates Shanghai shares are pricing at a premium to shares in the same company trading in Hong Kong, and vice versa.
The northbound quota for the Hong Kong-Shanghai Stock Connect, currently set at 13 billion yuan, saw net outflows of 0.20 billion yuan.
Total volume of A shares traded in Shanghai was 23.67 billion shares, while Shenzhen volume was 15.95 billion shares.
Total trading volume of companies included in the HSI index was 0.7 billion shares.
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