Stocks Tumble After Beijing Raises Required Bank Reserves

Hong Kong and Mainland stocks tumbled yesterday after Beijing announced it is curbing bank lending and raising the required bank reserves, says the South China Morning Post.

 

The newspaper says that the  Hang Seng Index dropped the most in more than six weeks, falling 578.04 points or 2.6% to close at 21,748.6. The sell-off was across the board and dragged half of the benchmark's 42 blue chips down by more than 3% each.

 

Harder hit was the H-share index, which lost 3.7% to 12,482.18 points, while the Shanghai Composite Index fell 3.1% to 3,172.658 points.

 

"The rise in the required reserve ratio came much earlier than expected," Steven Leung, a director of institutional sales at UOB Kay Hian, told the Post. "So to a certain extent it's normal that people would dump interest rate-related stocks like Chinese banks and Chinese property developers."