Shares in China’s start-up firms plunged as investors retreated after a few stocks were suspended from trading due to “abnormal volatility” amid reports of government measures to crack down on speculation.
The start-up board ChiNext Composite index, which gained more than 40 per cent this year, fell 1.6 per cent and Shanghai’s tech-focused STAR50 index lost 1.38 per cent. More than 300 start-ups dropped more than 10 per cent on Thursday, including 50 companies hitting their downside trading limits.
Analysts said investor sentiment was dented after some ChiNext stocks, including Xinjiang Tianshan Animal Husbandry Bio-Engineering, were suspended from trading on Wednesday due to “abnormal volatility”.
Shares of Chinese telecom firms also tumbled, as pressure widened for Huawei Technologies with major suppliers expected to stop supplying to the telecom giant after new U.S. restrictions.
The Shanghai Composite index was down 0.61 per cent at 3,234.82, while the blue-chip CSI300 index fell 0.06 per cent. Around the region, MSCI‘s Asia ex-Japan stock index was weaker by 0.72 per cent, while Japan’s Nikkei index closed up 0.88 per cent.
About 31.25 billion shares were traded on the Shanghai exchange, roughly 94.5 per cent of the market’s 30-day moving average of 33.07 billion shares a day. The volume in the previous trading session was 35.15 billion.