China stocks fall as banking, resources firms take a breather

Business Thursday 07/September/2017 13:00 PM
By: Times News Service
China stocks fall as banking, resources firms take a breather

Shanghai: China stocks fell on Thursday, as profit taking in resource shares following their recent rally and weakness in the banking sector offset strong gains in real estate companies.
The blue-chip CSI300 index fell 0.5 per cent, to 3,829.87 points, while the Shanghai Composite Index lost 0.6 per cent to 3,365.50 points.
However, the Shanghai index remains firmly above the 3,300 mark for the 10th session in a row, a level that had posed stiff resistance for the benchmark since early 2016.
The real estate sector led the gains with a 4.5 per cent jump, posting its best day in two months.
Banking and energy firms dragged on the market, with losses of 0.9 per cent and 1.5 per cent, respectively.
"Chinese stocks are expected to rise at a more balanced pace, with worries over 'new economy sector' easing as those growth firms report solid half-year earnings," Zhou Guang, analyst with China International Capital Corporation Limited (CICC) wrote in a recent note.
Tech-heavy start-up index ChiNext, which gauges growth stock price movements, has risen 2.2 per cent so far this month following a gain of 6.5 per cent in August. Growth stocks, such as the tech sector, were avoided earlier in the year as they were widely viewed as overvalued.
Expectations that economic growth will remain firm through to the end of the year have supported equities, Zhou said.
China's economy has surprised many by growing at a solid clip this year despite early worries that a crackdown on debt and curbs on the property market will knock output.
There are also hopes that regulators may loosen their grip on the market.
China's stock market recovery has created conditions for regulators to further relax rules on stock index futures trading and fully exit emergency measures adopted during the stock market turbulence of 2015, an official publication reported on Thursday.