Chinese shares close lower on liquidity concerns

Source: Xinhua| 2017-06-12 16:14:16|Editor: An
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BEIJING, June 12 (Xinhua) -- Chinese stocks closed lower Monday in a day of thin trading, with investors concerned over market liquidity.

The benchmark Shanghai Composite Index went down 0.59 percent to close at 3,139.88 points. The smaller Shenzhen Component Index closed 0.56 percent lower at 10,119.99 points.

The ChiNext Index, China's NASDAQ-style board, fell 1.15 percent to close at 1,775.55 points.

Total turnover on the two bourses shrank to 387.3 billion yuan (about 57 billion U.S. dollars) from 405.5 billion yuan the previous trading day.

Over 2,000 stocks across the two bourses fell, with stocks related to shipbuilding and steel among the biggest losers.

Bestway Marine & Energy Technology declined 4.82 percent to end at 7.51 yuan, and Xinjiang Bayi Iron & Steel lost 4.5 percent to close at 7.86 yuan.

"June is a cruel season for China's money market, with liquidity demand usually spiking on seasonal factors such as quarterly regulatory reviews, tax payments and the simple fear of a re-occurring liquidity crunch," said Zhao Yang, Nomura chief China economist.

A credit crunch at Chinese banks in June 2013 caused interbank interest rates to surge into double digits, pounding the stock market and sparking concerns among investors.

"We believe that liquidity conditions are likely to further tighten slightly in June, but a replay of a liquidity crunch is unlikely," Zhao said.