China's benchmark index ended at a 15-month low on Thursday,
leading losses on lower industrial commodities while investors
trimmed risky positions ahead of a week-long National Day holiday
The Shanghai Composite Index closed down 1.1 percent at
2,365.3 points, its lowest since July 2 and is down more than 14
percent so far this quarter.
"It could be flat to down going into the end of this week.
What's the point of holding onto so much risk ahead of such a
long holiday? No trader would want to do that in this
environment," said Hong Hao, a global strategist with CICC.
Gold and copper stocks led losses, pointing to investor
jitters over the
ahead of the release of China's official September purchasing
managers' index (
) data on Saturday .
The Shanghai Materials Index was the standout underperformer
among sector indices, finishing down more than 3 percent, with
Zijin Mining Group Co Ltd and Jiangxi Copper among the biggest
Zijin, the largest gold miner in the mainland, slumped over 4
percent to its lowest in a year as gold prices extended losses on
Thursday. It is down almost 12 percent since hitting a high on
July 14 this year.
Jiangxi Copper lost almost 3 percent after copper prices
collapsed in a wide-ranging decline in global
prices. It has lost more than 40 percent this year, pushing
multiples to its lowest since the 2008 financial crisis.
It is currently trading at 10.8 times forward 12-month
, compared to a historical median of 19 times, according to
Thomson Reuters Starmine data.
The benchmark index is still holding above a key technical
level at 2,357, the 61.8 percent Fibonacci retracement of its
rise from its October 2008 trough to its cyclical peak in April
Turnover of A-shares on the Shanghai bourse stayed lackluster,
in keeping with this week's trend.
FRANTIC FRIDAY SEEN IN HONG KONG
Hong Kong markets were shut on Thursday after Typhoon Nesat
triggered a No. 8 warning, closing financial markets, schools and
most businesses in the city.
But trading could be volatile if they reopen on Friday, as
Hang Seng Index
expired on Thursday and with many investors looking to finish
dressing up their portfolios at the end of the third quarter.
Mainland property stocks could come into renewed focus after
the Chongqing mayor told Reuters on Thursday that a pilot
programme to levy property taxes is helping to cool price rises
in the country's largest municipality and will eventually be
extended to the rest of the country.
Mainland property company
fell on Thursday, extending a recent slide on fears of a rapid
cooldown in the real estate market and falling prices.
Hedge fund managers, finding it difficult to sell their
investments in the bonds and credits of these companies earlier
this month, resorted to shorting their stocks, triggering a fresh
Index is poised for its worst quarter since the 2008 financial
crisis, down almost 20 percent to date. Steep losses this month
alone have opened up at least three gaps on the charts, pointing
to stiff resistance ahead.