SHANGHAI: China’s blue-chip stock index fell on Tuesday, marking its biggest daily loss since September after touching a 13-year high in the previous session, amid tightening liquidity conditions and Sino-US tensions.

At the close, the Shanghai Composite index was down 1.51% to 3,569.43, its biggest daily drop since Dec. 22.

The blue-chip CSI300 index tumbled 2.01%, its biggest one-day loss since Sept. 9. The CSI300 financial sector sub-index fell 1.71%, the consumer staples sector lost 1.11%, and the healthcare sub-index dropped 3.04%.

Financial firms came under pressure against a backdrop of tightening liquidity conditions. Short-term rates jumped to pre-COVID levels on Tuesday, with some investors speculating that the central bank might adopt a tightening bias in its monetary policy.

China-US relations continue to weigh on sentiment. China said on Tuesday it will conduct military exercises in the South China Sea this week, just days after Beijing bristled at a US aircraft carrier group’s entry into the disputed waters.

US President Joe Biden wants to approach relations with Beijing with “patience,” the White House said on Monday.

Meanwhile, index provider MSCI Inc said it will delete securities of five Chinese companies - including three Shanghai-listed firms - from some indexes as of the close on Jan. 27 in the absence of any guidance.

China Shipbuilding Industry fell 1.68%, China National Nuclear Power dipped 0.2% and China National Chem lost 0.52%.

The smaller Shenzhen index ended down 1.99% and the start-up board ChiNext Composite index was weaker by 2.88%.