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Shanghai - China’s benchmark stock index fell on the last trading day of this week as investors gauged the level of state support before a major military parade on Thursday.
The Shanghai Composite Index dropped 1.7% to 3 112.46 at 08:39, after gaining as much as 0.9% and sinking 4.7%. About eight stocks fell for every two that gained on the measure. China’s financial markets will be closed for the rest of the week for holidays commemorating the end of World War II.
The benchmark stock measure is extending its biggest two- month loss since 2008 after traders reduced holdings of shares purchased with borrowed money for an 11th day and an official factory gauge fell to the lowest reading in three years.
Large- company shares rebounded in late trade over the past five days from session lows amid speculated purchases by state-backed funds.
“Shares are still overvalued,” said Daniel So, a strategist at CMB International Securities in Hong Kong. “Downside risks are larger than upside potential.”
The CSI 300 Index slid 0.9%. Hong Kong’s Hang Seng China Enterprises Index retreated 1.2% to its lowest level since March 2014, while the Hang Seng Index slipped 0.9%.
Shares on mainland exchanges are still more than twice as expensive as their identical counterparts in Hong Kong. Dual- listed companies traded at an average 115% premium in China at the end of last month, within three percentage points of a four-year high in July, according to monthly data compiled by Bloomberg.
The price differences have persisted even as a $4.9trn selloff dragged the Shanghai Composite down 39% from this year’s high.
