Shenzhen Stocks Sink Most in 10 Months in Sudden Afternoon Drop
- Tumble follows increasing volatility in bond, currency markets
- Traders attribute selloff to concern about increasing IPOs
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Stocks in China’s second-largest equity market plunged the most in 10 months, underscoring the increasing fragility of the nation’s financial assets.
The Shenzhen Composite Index sank as much as 6.1 percent, the biggest loss since Feb. 29. Traders pointed to concern that regulators will accelerate the pace of initial public offerings, already at a 19-year high, diverting liquidity from existing shares. The Shanghai Composite Index dropped as much as 2.2 percent in minutes before paring losses amid speculated buying by state-backed funds.