As Bloomberg reports, China’s stocks fell for the first time in four days as concern that new share sales will divert funds from existing equities overshadowed data showing economic growth topped estimates and June home sales surged.
- The biggest
company in the ChiNext index, Leshi Internet Information & Technology Co. plunged 9.8 percent.
- Ping An Bank
Co. dropped to a one-month low after saying it plans a sale of
preferred shares.
- Poly Real Estate Group Co. led a rally for
developers after data showed home sales rebounded 33 percent
last month.
- SDIC Power Holdings Co. surged to the highest level
since 2008.
- COFCO Tunhe Co. jumped 10 percent after the government chose six state-owned enterprises for reform.
The Shanghai Composite Index (SHCOMP) lost 0.2 percent to 2,067.28 at the close. The ChiNext index, dominated by technology and health-care stocks, dropped 1.7 percent. The 12 initial public offerings that recently received regulatory approval may freeze subscription funds of as much as 766.5 billion yuan ($124 billion), the Securities Daily reported.
“Small caps are too expensive so they are still falling,” said Xu Shengjun, an analyst at Jianghai Securities in Shanghai. “The growth data were within expectations today.”
As the statistics bureau said, China’s gross domestic product grew 7.5 percent in the April-June period, compared with the 7.4 percent median estimate in a Bloomberg News survey of analysts. Growth accelerated for the first time in three quarters after Premier Li Keqiang’s government sped up railway spending and reduced reserve requirements for some lenders to protect an annual growth goal of about 7.5 percent that’s under threat from a slumping property market.
The ChiNext has gained 85 percent since the start of last year, sending valuations to 29 times 12-month projected earnings, while the Shanghai index has lost 8.9 percent. The latter trades at 7.6 times profit.
The Bloomberg China-US Equity Index added 0.3 percent in New York. The CSI 300 Index (SHSZ300) dropped 0.2 percent today. The Hang Seng China Enterprises Index slipped 0.2 percent at 3:04 p.m. Trading volumes in the Shanghai index were 52 percent above the 30-day average, according to data compiled by Bloomberg.
