At the close, the Shanghai Composite index was down 1.1% at 3,505.63. The blue-chip CSI300 index was down 1.04%, with its financial sector sub-index lower by 2.33% and the real estate index down 2.36%.
Shares and bonds of Chinese property developers stumbled as worries over spreading financial contagion worsened following a debt exchange from one of the country’s top 20 homebuilders that triggered a flurry of credit warnings.
The CSI energy index fell 2.55%, following a 13% drop on Monday. China said on Sunday it was releasing gasoline and diesel reserves to boost market supply and stabilise prices.
“Negative growth in Q3 earnings might deepen investors’ concerns about an economic downturn. Looking into Q4, weaker economic activities and a higher earnings base could weigh further on growth momentum, and we do not rule out negative earnings growth continuing in Q4,” analysts at UBS said in a report.
“We think cyclical sectors will face greater pressure for downward revisions to earnings along with the current notable slowdown in earnings growth,” they added.
The smaller Shenzhen index ended down 0.9% and the start-up board ChiNext Composite index was higher by 0.23%. Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.25%, while Japan’s Nikkei index closed down 0.43%.
