China shares tumble 5 percent on rate rise rumor

SHANGHAI (BestGrowthStock) – China’s key stock index posted its biggest percentage loss since May, dropping 5.2 percent on Friday, with investors selling off big cap financials and resource issues on rumors of further monetary tightening.

Traders said a plunge in commodity futures, that had dropped on talk of an imminent rate rise, rattled investor sentiment.

The Shanghai Composite Index (.SSEC: ) was at 2,981.6 by 0645 GMT (1:45 a.m. ET), after rising 1 percent on Thursday, when it surged in intraday trade to near a level not seen since January.

Analysts said greater volatility was to be expected for the index heading into the year-end as authorities take steps to keep liquidity in the financial system in check, including this week’s increase in banks’ required reserves.

(Reporting by Farah Master; Editing by Jacqueline Wong)

China shares tumble 5 percent on rate rise rumor