SHANGHAI: China shares fell on Monday amid continued investor uncertainty over the outlook for Sino- US trade, monetary policy and corporate earnings, while tech firms came under pressure ahead of listings on China's new high-tech board.
At the midday break, the Shanghai Composite index was down 2.46 per cent at 2,936.97 points. China's blue-chip CSI300 index was down 2.28 per cent, with its financial sector sub-index lower by 2.19 per cent, the consumer staples sector slipped 1.35 per cent, the real estate index fell 2.13 per cent and the healthcare sub-index down 2.14 per cent.
Chinese H-shares listed in Hong Kong dropped 1.63 per cent to 10,717.99, while the Hang Seng Index was down 1.64 per cent at 28,301.77. The smaller Shenzhen index was down 2.66 per cent and the start-up board ChiNext Composite index was weaker by 2.56 per cent.
Analysts at Huatai Securities said they expect markets to remain relatively stable as despite an initial surge last week prompted by a better-than-expected G20 outcome, "a turning point in fundamentals has not yet arrived". With company mid-year reports due soon, "results could become the biggest impetus for the market in the near-term," they said in a note.
"With the Sino- US relaxation and the opening of the gates to the
STAR Market, investors could watch tech shares in the interim. But with the concentration of new listings this week, investors should be on guard against the impact on market liquidity," the analysts said.
At least 22 companies are set to conduct initial public offerings this week, of which 21 are on China's new high-tech STAR Market. The
Shanghai Stock Exchange said on Friday that the trading in shares of the first batch of companies on the STAR Market will begin on July 22. Computer firms slumped 3.47 per cent and IT firms dropped 3.31 per cent.
Investors are also closely watching watching the US economy, where stronger-than-expected nonfarm payrolls data tempered expectations that the Federal Reserve will aggressively ease rates at its July meeting. "Whether the Fed can begin cutting rates in July is crucial. This will decide the degree of monetary easing in China and impact the height of the recovery in A-shares," analysts at Lianxun Securities said in a note.
Around the region,
MSCI's Asia ex-Japan stock index was weaker by 1.30 per cent, while Japan's Nikkei index was down 0.89 per cent. The yuan was quoted at 6.8908 per US dollar, 0.05 per cent firmer than the previous close of 6.894.
The largest percentage gainers in the main Shanghai Composite index were Harbin High-Tech Group Co Ltd, up 9.96 per cent, followed by Danhua Chemical Technology Co Ltd, gaining 9.93 per cent and Weifang Yaxing Chemical Co Ltd, up by 9.92 per cent. The largest percentage losses in the Shanghai index were Jiangsu Boxin Investing & Holdings Co Ltd, down 10.02 per cent, followed by Guangdong Liantai Environmental Protection Co Ltd, losing 10.02 per cent and Seazen Holdings Co Ltd , down by 10.01 per cent.
So far this year, the Shanghai stock index climbed 20.74 per cent, while China's H-share index rose 7.6 per cent. Shanghai stocks gained 1.08 per cent so far this month. The top gainers among H-shares were
Guangdong Investment Ltd , up 1.13 per cent and PICC Property and Casualty Co Ltd , gaining 0.35 per cent. The three biggest H-shares percentage decliners were
ANTA Sports Products Ltd, down 7.32 per cent, CSPC Pharmaceutical Group Ltd, which fell 3.4 per cent and Anhui Conch Cement Co Ltd, which lost 3.2 per cent. In Hong Kong, the sub-index of the Hang Seng index tracking energy shares dipped 1.9 per cent, while the IT sector dropped 1.8 per cent. The top gainer on the Hang Seng was China Mobile Ltd, up 0.71 per cent, while the biggest loser was Wharf Real Estate
Investment Company Ltd, which slumped 4 per cent.