China stocks hits monthly lows on regulatory curb concerns

Chinese stocks dropped to fresh one-month lows on Thursday on concerns the government will act to cool speculative activity in the nation’s financial markets. The decline was mainly led by by property and small-cap stocks.

The Chinese benchmark index, the Shanghai Composite recovered some ground at close, settling the day -0.57% at 3,068, heading for its biggest decline since July 27 and breaching the crucial 200-DMA support. 

Bloomberg reports, “The government on Wednesday imposed limits on lending by peer-to-peer platforms to individuals and companies in an effort to curb risks in one part of the loosely regulated shadow-banking sector. The same day it sold 14-day reverse-repurchase agreements, its first offering of anything with a tenor other than seven days since February, spurring speculation officials want to curb leverage in the bond market by making it less profitable for investors borrowing to buy 10-year debt.”