China stocks suffer sharp sell-off on multiple investor worries
* SSEC loses 2.9 pct, touches lowest point since Nov 2014
* CSI 300 down 2.4 pct, energy sub index drops 4.9 pct
* Shares pledged for loans become a concern for investors
By Noah Sin
HONG KONG, Oct 18 (Reuters) - Chinese stocks fell sharply onThursday as heavy selling in the energy sector and worries aboutthe levels of borrowing in the stock market added to broaderconcerns over growth and the global sell-off in equities.
The Shanghai Composite index closed down 2.9 percentat 2,486.42, after hitting its lowest point since November 2014on Thursday morning. The blue-chip CSI300 index was down 2.4 percent.
Li Zheming, an analyst at Datong Securities in Xi'an, saidthe market was dragged down by a confluence of factors, and thatoverall market sentiment was weak on Thursday.
"Investors have been concerned about risks posed by sharespledged for loans," said Li Zheming, referring to the jump inmargin lending where major investors in companies borrow bypledging their shares.
"There is also some connection with the fall in oil prices,"he said.
More than 637 billion shares worth 4.44 trillion yuan($639.86 billion) were pledged for loans as of Oct. 12,according to Reuters' calculations based on data from the ChinaSecurities Depository and Clearing Co.(CSDC).
Chinese stocks have fared worse than other stock markets inAsia this year, particularly in recent weeks as global equitiesbear the brunt of a simmering U.S.-Sino trade war and theprospect of further policy tightening by the U.S. FederalReserve.
There was barely any palpable relief on news that the U.S.Treasury Department had refrained from naming China a currencymanipulator in its semi-annual report released on Wednesday.
Instead, minutes from the Fed's Sept. 25-26 meeting, whichshowed every Fed policymaker backed raising interest rates lastmonth, warnings from China's premier that the economy facesincreasing downward pressure, and worries ahead of GDP dataBeijing is due to release on Friday weighed on markets.
The yuan ended domestic trading at its weakestclose against the dollar since January 2017.
So far this year, the Shanghai stock index is down 24.8percent and the CSI300 has fallen 24.5 percent. Shanghai stockshave declined 11.9 percent this month.
Energy stocks were led lower by falling energy prices . CSI's sub-index tracking energy stocks was down 4.91 pct.
The CSI 300 financial sector sub-index was lowerby 2.08 percent, the consumer staples sector down 2.17percent , the real estate index off 1.82 percentand healthcare sub-index 3.89 percent lower.
The across-the-board decline came after a brief bounce-backon Wednesday. Hong Kong's stock market , reopening after a holidayon Wednesday, closed flat on Thursday. Around the region, MSCI'sAsia ex-Japan stock index was weaker by 0.65percent, while Japan's Nikkei index closed down 0.8percent.
China's smaller Shenzhen index ended down 2.73percent and the start-up board ChiNext Composite index was weaker by 2.18 percent.
(Additional reporting by Andrew Galbraith in Shanghai; Editingby Vidya Ranganathan and Richard Borsuk)
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