China shares sink to 6-month lows as flash PMI compounds cash crunch fears
HONG KONG, June 20 (Reuters) - China shares slumped to their lowest levels since December on Thursday after a preliminary survey showed manufacturing activity in the mainland hit a nine-month low, aggravating jitters from a cash squeeze that is threatening to overwhelm the interbank market.
The CSI300 of the leading Shanghai and Shenzhen A-shares listings closed down 3.3 percent at 2,321.5 points. The Shanghai Composite Index sank 2.8 percent.
Losses accelerated in the afternoon, pushing the CSI300 below chart support at about 2,346, a level that it bounced off for more than week in December, pointing at more losses ahead.
Shanghai volumes remained anaemic, however, as China's two shortest-term money rates spiked to record highs on Thursday, with the central bank again ignoring market pressure to inject funds into the market despite fresh evidence that the economy is slowing.
The flash HSBC Purchasing Managers' Index fell to 48.3 in June from May's final reading of 49.2, drifting further away from the 50-point level demarcating expansion from contraction. It was the weakest level since September.
(Reporting by Clement Tan; Editing by Kim Coghill)