source from:FT website
February 25, 2016 9:04 am
China shares suffer biggest drop in a month
Peter Wells in Hong Kong

Chinese shares posted their biggest one-day drop in a month on Thursday, with key indices closing more than 6 per cent lower after a late sell-off.
The Shanghai Composite fell 6.4 per cent to 2,741.2, having been down as much as 6.8 per cent in the final 15 minutes of trading. The tech-focused Shenzhen Composite shed 7.3 per cent to 1,738.67, while the CSI 300 — comprising the top 300 stocks on both bourses — ended down 6.1 per cent.
All three benchmarks are down more than 20 per cent so far this year.
“Investors can be demanding and unforgiving,” said Steven Sun, HSBC’s head of Hong Kong-China equity research.
“China’s financial market is increasingly correlated with global financial markets and different asset classes are becoming more correlated with each other. As far as the equity market is concerned, this dynamic has translated into new levels of volatility.”
The Thursday tumble comes ahead of the two-day meeting of G20 finance ministers and central bankers in Shanghai, which begins on Friday. Against a backdrop of a slowing Chinese economy, Yi Gang, the central bank’s deputy governor, reassured attendees at a conference on the eve of the G20 meeting that demand “will remain fairly strong” for the foreseeable future.
HSBC also expects the Chinese market to rebound in coming months, in part due to a more stable renminbi, and points to a surge in share buybacks during January, which the bank’s Mr Sun called an “accurate indicator of the market and valuations bottoming out” in 2001 and 2008.