Chinese banks dragged the Hong Kong market below its 250-day moving average today after Singapore state investor Temasek Holdings sold a combined $3.6 billion of its holdings in two of China's largest banks.
The benchmark Hang Seng Index closed down 1.01 per cent at 22,517.55 points, while the China Enterprises Index plunged 1.9 per cent to finish at 12,598.34.
On the mainland, the Shanghai Composite Index closed down 0.21 percent at 2,810.48, dipping below its 250-day moving average that has provided support for the last two sessions.
Temasek's reduction of its stakes in Bank of China and China Construction Bank (CCB) pushed their shares down more than 3 per cent each in Hong Kong, single-handedly lifting overall market turnover to the highest level since early April.
Other "Big Four" peers also lost on the day. Industrial and Commercial Bank of China fell 2.5 per cent, while Agricultural Bank of China (ABC) shed 4.8 per cent.
With the impending expiry of lock-up periods for their cornerstone investors in the next two months, CCB and ABC were the top two most shorted stocks, with Bank of China and ICBC rounding up the top five. About 10 per cent of ABC's total volume today was shorted ahead of several expirations expected in mid-July.
Reuters
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