China's markets went on a roller coaster ride Tuesday, moving in all directions and closing mixed following a sharp selloff in the previous session.
In unstable trading, the Shanghai Composite closed down 8.55 points, or 0.26 percent, at 3,287.7 after rising as much as 0.95 percent and falling as much as 3.2 percent earlier in the session. The smaller Shenzhen Composite finished down 39.38 points, or 1.86 percent, at 2,079.77, while the CSI300 erased losses to end up 9.71 points, or 0.28 percent, at 3,478.78.
This followed Monday's trading session which saw Chinese equities plunging after weak manufacturing surveys revived concerns over the country's economic slowdown.
Selloff Due to Several Factors
According to Goldman Sachs, China’s Monday selloff was brought on by several other factors which included increased market concerns over near-term liquidity, capital outflows, monetary tightening and inactive policy stimulus.
Before trading started, the People's Bank of China set Tuesday's yuan fix at 6.5169 against the dollar, compared with Monday's fix of 6.5032, representing a 0.21 percent increase.
Other Asian equities ended Tuesday mixed. Hong Kong’s Hang Seng Index erased mid-morning gains to trade down 0.56 percent while the Australian ASX 200 index closed down 86.075 points, or 1.63 percent, at 5,184.40, with an overall poor performance across all sectors. Energy and healthcare sectors were the big losers, down over 2 percent each, while financials lost 1.43 percent.
Angus Nicholson market analyst at spreadbetter IG, said that "The concerns China sparked yesterday, with its PMI miss and market selloff, hit commodities fairly hard overnight, setting up a fairly poor performance for both the materials and energy sectors. The only exceptions to the rule were gold mining stocks, which rallied on safe-haven buying for gold."