• Dangerous games

    Employers' body Neasa is playing a potentially dangerous game, says Terry Bell.

  • Rational thinking

    All players should first consider the net result of their actions, says Leopold Scholtz.

  • Telkom's property poser

    BEE may be hindering Telkom's plans to offload redundant real estate, says Gugu Lourie.

Data provided by iNet BFA
Loading...
See More

China shares sink to a 7-week low

Nov 13 2012 13:20 Reuters

Related Articles

World stocks sag on US fiscal fears

Asian markets extend losses on US fears

Asian stocks tumble

Shares, euro steady ahead of key meeting

Fiscal cliff fears keep Wall Street subdued

Wall St scrambles to raise cash

 
Hong Kong - Onshore Chinese shares slid to a seven-week low and weighed on Hong Kong stocks on Tuesday after state media reported that housing market curbs will remain, raising fears that the ongoing party congress will spawn little change in economic policies.

Several news outlets reported that China's housing minister told reporters on Monday on the sidelines of the 18th Communist Party congress meeting, which ends on Wednesday, that he does not expect any loosening of the sector's restrictions.

Turnover in Hong Kong rose more than 13% from Monday, but was still some 8% below the 30-day average. Traders said festering uncertainty over the US fiscal situation and further aid to debt-stricken Greece kept many investors on the sidelines.

The Hang Seng Index ended down 1.1% at 21 188.7. The China Enterprises Index of the top Chinese listings in Hong Kong dived 2%. Tuesday's losses took both indices to their lowest closes since mid-October.

In the mainland, the CSI300 Index of the largest Shanghai and Shenzhen listings sank 1.8%. The Shanghai Composite Index fell 1.5%. Both indices ended at their lowest since late September.

Investors are taking the continuation of housing curbs "as perhaps a sign there won't be any loosening or changes in Beijing's economic policy positions in the near term," said Hong Hao, chief equity strategist at Bank of Communications International Securities.

"A lot of the money that has come into offshore Chinese equities in the last nine weeks has gone into the cyclical names, betting on stronger growth from policy changes, but I think they will be disappointed," Hong added.

The China Enterprises Index, or the H-share index, has shed 5.6% from a November 2 high. It had surged 14% in September and October, ranking among the top performing indices in those two months.

Since Nov. 2, there's been a 4.1% loss on the CSI300 Index and a 3.3% slide on the Shanghai Composite.

The H-share underperformance has moved the Hang Seng Index A/H premium index back to near parity.

It is now at 99.9, the highest since Oct. 17 after having traded below 100 for more than three weeks. This suggests the premium that onshore markets typically trade over offshore peers could return if H-shares continue to underperform A-shares.

Shares of Chinese oil giants were put on the defensive due to falling oil prices.

Chinese media reported on Tuesday that Beijing could cut gasoline and diesel prices in the mainland for a fourth time this year, perhaps as soon as Wednesday.

In Hong Kong, China Petroleum and Chemical (Sinopec) lost 3%, while CNOOC shed 0.9% and Petrochina fell 1.9%.
 
China policy fears drive losses

On Tuesday, growth-sensitive sectors whose performance is seen linked to the Chinese property sector suffered the brunt of the losses after the state-run China Daily newspaper reported the country's housing minister as also saying that Beijing is "actively studying" expanding property tax beyond Chongqing and Shanghai.

While these statements did not offer anything new, they compounded jitters that no policy changes will emerge from this meeting that marks the formal start of a once-in-a-decade political transition. The new Politburo Standing Committee lineup is expected to be announced on Thursday.

Chinese railway and infrastructure-related counters, which led a rally in September and October, trimmed 2012 gains. China Railway Group dived 6.2% from Monday's near 19-month high in Hong Kong. It is still up 69% this year.

Zoomlion Heavy Industry shed 3.4% in Hong Kong and 1.3% in Shenzhen. Zoomlion was among the top performers among Chinese growth-sensitive names in Hong Kong, and surged more than 25% in September and October.

The Shanghai property sub-index was down 2.1% on Tuesday, with Poly Real Estate off 1.4%. Shenzhen-listed China Vanke shed 2.2%.

In Hong Kong, China Resources Land lost 1.5%, trimming its 2012 gains to 45%.

Official data for October housing prices is expected on Sunday. But in a sign of things to come, the state-run China Securities Journal, citing data from the Beijing Municipal Bureau of Statistics, reported that the capital's property sales in the first 10 months of 2012 surpassed full-year sales in 2011.

hong kong  |  china  |  international markets
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

A cash flow crunch often occurs in small businesses trying to balance cash coming in with cash going out. Watch this video to help you improve.
 
 

No need to keep up with the Joneses

Fin24 users provide their own personal tips on how to save money instead of trying to keep up with the Joneses.

 
 

Start saving...

Where can you stash your cash?
Time the key for retirement saving
Dummy's guide to saving
Save money with affordable account

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...