Regulatory Moves Shake Chinese Stock Markets

Chinese stocks faced a setback as regulatory moves sought to curb speculative trading. The Shanghai Composite Index, Hang Seng Index, and various sectors witnessed fluctuations, indicating near-term volatility, especially in tech and innovation. Analysts suggest the impact will be temporary with a focus on maintaining market liquidity.

On Thursday, Chinese stocks took a hit as regulators implemented measures to curb speculative trading, halting a strong start to the year. The Shanghai Composite Index fell by 0.3% to 4,112.60, marking its third consecutive day of losses and temporarily pausing its upward momentum.

Similarly, the Hang Seng Index in Hong Kong experienced a decline of 0.3%, closing at 26,923.62, while the tech index saw a more significant dip of 1.4%. This decline followed regulators' unexpected tightening of margin requirements aimed at cooling the overheated stock market, which had been witnessing record turnovers and leverage bets.

Despite the downturn, analysts suggest that the impact of these regulatory moves will be short-lived and manageable, with a continued commitment to a "slow-bull" market approach ensuring liquidity. However, sectors like defense and others recorded notable losses, while semiconductor and AI-related shares saw recovery spurred by TSMC's positive profit announcement and growth outlook.

(With inputs from agencies.)