Stocks slip as fund managers desert market

folarin okunola

August 31, 2015 1:14 PM

The benchmark Shanghai Composite index ended the session at 3,205.99, with a decline of 0.78%. Earlier during trading the index had been down as much as 3.81%.

map of China

The benchmark Shanghai Composite was down 1.07% with less than 30 minutes to trade on Monday, but another late rally left Chinese stocks mixed at the close.

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For the month the index went down 12.49%, following a much deeper 14.34% drop in July.

Although the Composite finished lower, large capitalization stocks were broadly higher with the SSE 50 and CSI 300 indexes – largely made up of larger firms listed in Shanghai and Shenzhen — closing at 2.48% and 0.73% respectively.

Just like late last week, both indexes staged suprising turnarounds in the final minutes of trade. The SSE 50, for instance, was down more than 4% before staging a 6.84% comeback over the final 106 minutes of trade, closing at its session highs.

The sheer scale of the increase suggests the government was yet again involved in the sharp turnaround in fortunes.

However, small-cap stocks were seriously hammered despite gains for their larger rivals. The CSI 500, an index that contains the 500 largest listed firms by market capitalisation in Shanghai and Shenzhen, fell by 3.82%, the Shenzhen Composite slid by 3.06% and tech-heavy ChiNext indexes slid by 4.10%.

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Over the weekend, various reports suggested that China's government may refrain from making further large-scale stock purchases to stabilise the nation's share market.

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