China shares sink to lowest levels since early 2009

  China shares extended losses on Tuesday, sinking to their lowest levels since early 2009, with the financial sector again hard hit on expectations that an official crackdown on easy credit and tighter funding conditions will persist.

 

At 0325 GMT, the CSI300 of the leading Shanghai and Shenzhen listings was down 4.5% at its lowest since February 2009. The Shanghai Composite Index slid 3.5 % to its lowest since January 2009.

 

Tuesday's losses came despite money market rates easing for a third-straight session. The benchmark seven-day repo rate opened at 5.73% on Tuesday, down from 7.53% at Monday's close and an all-time high of 11.62% on Thursday.

 

At its open market operations window on Tuesday, where it can inject or withdraw cash from the banking system, the PBOC opted to do nothing. It also did not auction any central bank bills, which would have taken funds from the market.