China shares drop amid heavy selling by foreign investors

China's CSI 300 blue-chip share index fell on Thursday to its lowest in nearly 16 months, as global concern that the U.S. Federal Reserve would move aggressively to cap inflation sparked selling by foreign investors. The CSI 300 fell as much as 1.64% in morning trade to touch its lowest level since Sept.

China's CSI 300 blue-chip share index fell on Thursday to its lowest in nearly 16 months, as global concern that the U.S. Federal Reserve would move aggressively to cap inflation sparked selling by foreign investors.

The CSI 300 fell as much as 1.64% in morning trade to touch its lowest level since Sept. 30, 2020, and the Shanghai Composite index fell as much as 1.47%. Both indexes later trimmed their losses to fall between 0.6% and 0.7%. Losses were led by tech shares, with an index tracking the computer sector last down down 3.11% and the CSI Info Tech index down 2.46%.

The drop in A-shares came amid a global pull back in equities after U.S. Federal Reserve Chairman Jerome Powell warned that inflation remains above the Fed's long-run goal and supply chain issues may be more persistent than previously thought. Foreign investors were heavy sellers of Chinese shares on Thursday, with Refinitiv data showing outflows through the Northbound leg of China's Stock Connect programme nearing 8 billion yuan.