Global investors have been offloading China’s flagship stocks in a record-selling streak, showing the nation’s industry leaders are falling out of favour amid concerns for the economy.
Foreign investors sold 6.2bn yuan (£676m) of Kweichow Moutai from August 7 to 18, making China’s largest spirits maker the most heavily sold stock via trading links with Hong Kong.
It was followed by 4.7bn yuan of selling each for leading renewables stock LONGi Green Energy Technology and major lender China Merchants Bank.
Overseas funds have been fleeing the Chinese market, offloading the equivalent of £7.3bn in a twelve-day run of withdrawals to Tuesday, the longest since Bloomberg began tracking the data in 2016.
The exodus comes after China underwhelmed markets with its latest changes to interest rates earlier this week.
The world’s second-largest economy is dealing with a prolonged housing slump, making its CSI 300 Index among the worst global performers this month with a 7pc loss. It is now trading near the lowest since November.
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What happened overnight
Asian markets were mixed as investors awaited results from tech darling Nvidia to see if the sector’s lofty valuations can withstand a jump in bond yields, while still gloomy factory readings from Japan left sentiment fragile.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3pc, hovering not far away from its nine-month trough hit just two sessions ago. Japan’s Nikkei also eked out a gain of 0.3pc.
Data on Wednesday showed Japan’s factory activity shrank for a third straight month in August, offering the first glimpse into the health of global manufacturing this month. The United States will also report its flash PMI readings on Wednesday, which is likely to show the factory sector remained in contraction.
The benchmark 10-year Japanese government bond yield advanced to a fresh 9-1/2-year peak of 0.675pc, as investors took the Bank of Japan’s decision to refrain from intervening to buy bonds as a green light for further selling.
In China, bluechips failed to hold onto Tuesday’s gains, falling 0.9pc, while Hong Kong’s Hang Seng Index held up better, up 0.6pc after a 1pc jump.
Wall Street stocks ended lower on Tuesday as higher Treasury bond yields fuelled concerns over whether the Federal Reserve will keep interest rates higher for longer.
The Dow Jones Industrial Average fell 0.5pc to 34,288.83, while the broad-based S&P 500 dropped 0.3pc to 4,387.55.
The tech-centered Nasdaq Composite Index nudged up 0.1pc to finish at 13,505.87.
The benchmark 10-year Treasury yield nearly reached a 16-year high after interest rate fears triggered a selloff in the bond market.
