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  • Home > News > Details
    Stocks break seven

    Mainland stocks fell for the first time in eight days, halting its longest-winning streak since May, as financial and commodity companies slumped.

    The Shanghai Composite Index fell below 3,000 points after rising above that level for the first time in two months on Monday. Trading volumes were 30 percent above the average. Guotai Junan Securities Co paced declines for brokerages after rising by the day's 10 percent limit on Monday. Air China Ltd led losses by airlines shares in Hong Kong as Brussels airport was evacuated after two explosions.

    The Shanghai gauge rebounded 14 percent from a January low through Monday amid signs of State-fund buying during this month's National People's Congress and as policymakers loosened controls on margin lending. Recent media reports citing People's Bank of China Governor Zhou Xiaochuan as encouraging individuals to invest personal savings in the stock market were "misinterpretations", the central bank said in a Weibo post.

    "The market is seeing a technical correction after a seven-day rising streak as investors take profits at the key level of 3,000," said Ken Chen, Shanghai-based analyst at KGI Securities Co. "The PBOC's clarification that it's not encouraging people to invest personal savings in stocks is slightly negative to investors," he said, adding that recent gains are "still a rebound rather than the start of a bull market".

    The Shanghai gauge fell 0.6 percent to 2,999.36 at the close. The CSI 300 Index declined 0.7 percent. The Hang Seng China Enterprises Index dropped 0.3 percent at the close in Hong Kong, while the Hang Seng Index slipped 0.1 percent.

    Gauges of financial, materials and healthcare companies in the CSI 300 retreated at least 0.8 percent, the steepest declines among 10 industry groups. Baoshan Iron Steel Co fell for the first time in five days, losing 2 percent. Guotai Junan Securities dropped 3.7 percent, while CITIC Securities Co, the nation's biggest brokerage, declined 3.5 percent.

    China Securities Finance Corp, the State-backed agency that provides funding to brokerages for margin trading, said late Friday it will restart offering loans to securities firms for periods ranging from 7 days to 182 days.

    China's margin financing is unlikely to recover quickly even after the nation relaxed controls on stock lending, Francis Chan, a Hong Kong-based analyst at Bloomberg Intelligence wrote. This is because exchanges raised margin requirements for brokers and investors in November 2015, he said.

    (China Daily USA 03/23/2016 page16)

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