China stocks fall on tech share slide, concerns for economy momentum rise

China stocks fell on Monday as tech plays succumbed to a sell- off in the US and other Asian markets and as investors worried that tighter credit will drag on corporate profitability and economic growth in upcoming months.

The blue- chip CSI300 index showed little change at 3,574.39 points, while the Shanghai Composite Index lost 0.59 percent to 3,139.88.

Tech shares dropped sharply, following a sell- off on Wall Street on Friday triggered by concerns about Apple’s new iPhone and a cautious Goldman Sachs report about the sector.

The tech- heavy growth board ChiNext lost 1.15 percent, while the CSI TMT Index dropped 1.5 percent.

Elsewhere, investors dumped cyclical stocks on views that the economy will lose momentum in the second half of the year as borrowing costs continue to rise and as regulators continue their crackdown on riskier forms of lending.

UBS strategist Gao Ting said that although Chinese investors “are likely mentally prepared for short- term liquidity pressure due to financial regulations, we don’t believe they pay enough atten- tion to future economic trends.”

Gao said that general credit conditions may tighten, hitting property and other investment activity, and that factory gate prices “may decline rapidly.”

Haitong Securities analyst Jiang Chao said that “credit tightening presents the biggest risk in the second half” as China’s deleveraging campaign starts to ripple through the real economy.

A sentiment from major State- controlled newspapers on Monday urged the stock market regulator not to “balk or backtrack” on reforms, denting hopes that approvals of new IPOs could be suspended if the market remains weak.

Bucking the trend, China Vanke hit a six- month high before ending at 4 percent after Shenzhen Metro became the developer’s largest shareholder.