Shanghai Composite retreats after touching 3,700 level
At market close, the Shanghai Composite Index was down 0.5% at 3,666.44, after briefly topping the 3,700 level for the first time since December 2021. The decline also snapped a three-day winning streak and marked the biggest pullback in two weeks.
The blue-chip CSI300 Index also gave up gains to close largely flat.
'I think the overall market is still trending upward, though there might be a bit of a correction, which actually is a good thing because it makes the movement healthier,' said Kevin You, deputy portfolio manager of Allianz China A-Shares Equity Fund.
The steel sector dropped 2.1% and communications sector lost 2.2% to weigh on markets.
Offsetting the losses, the tech-focused STAR50 index was up 0.8%?, the semiconductor index jumped 1.5% and the insurance sector jumped 2.3%.
Citi analysts said Beijing's incremental demand-side stimulus has been well on track following the Politburo meeting in July, as measures such as interest subsidy for consumption loans, mega dam project in Tibet and an 'anti-involution' campaign have all helped sentiment.
'Risk appetite seems to be returning' with margin buying surpassing 2 trillion yuan last seen in the 2015 bull market, and external risks could be largely defused for now with the US-China tariff truce officially extended to mid-November, they said.
In Hong Kong, the benchmark Hang Seng Index weakened 0.4% to 25,519.32. The tech index lost 1%.
Market heavyweight Tencent briefly touched HK$600 per share for the first time since 2021, after it reported a 15% revenue rise in the last quarter on strong gaming performance.
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