At closing bell, the benchmark Shanghai Composite Index stumbled 1.42%, or 52.77 points, to 3,662.60. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 0.48%, or 11.95 points, to 2,488.88. The blue-chip CSI300 index dropped 1.49%, or 74.50 points, to 4,917.16.
China's tightening grip on its technology companies and a widening liquidity crisis for the country's most indebted developer continued to keep investors on edge. China's technology stocks are closely scrutinised after authorities told the country's tech giants to stop blocking each other's links on their sites. The directive was the latest in a string of tightening regulations.
A new batch of China's economic report cards may offer an insight into how Asia's largest economy is faring amid pockets of lockdowns triggered by the sporadic Delta outbreak. The government will release the August statistics of retail sales, industrial production and investments data on Wednesday which market pundits expects to moderate last month.
The market fears of liquidity tightness in the interbank market renewed due to strong demand for the Chinese currency in the forward market as banks need to shore up their yuan positions towards the quarter-end and ahead of the week-long National Day holiday starting on Oct. 1. Investors are paying close attention to the PBOC's open market operations on Wednesday, when 600 billion yuan worth in a medium-term lending facility is set to expire.
CURRENCY NEWS: China's yuan firmed up against the U.S. dollar on Tuesday despite softer mid-point fixing by central bank. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.45 per dollar, 3 pips weaker than the previous fix of 6.4497. In the spot market, onshore yuan CNY=CFXS opened at 6.4488 per dollar and was changing hands at 6.4472 at midday, 53 pips firmer than the previous late session close.
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