Start-ups lead China stocks lower after profit warnings

China stocks fell on Thursday, with the start-up index closing at a more than six-month low, as investors dumped firms which are expected to report weak 2017 earnings and took profits ahead of the upcoming weeklong lunar new year holidays.

At the close, the Shanghai Composite Index was down 33.85 points, or 0.97 percent, at 3,446.98, losing ground for the fourth session. Meanwhile, the blue-chip CSI300 index was down 0.70 percent.

The smaller Shenzhen index ended down 2.65 percent and the start-up board ChiNext index was weaker by 2.17 percent.

The largest percentage gainers in the main Shanghai Composite Index were Hebei Baoshuo Co up 8.06 percent, followed by Besttone Holding Co gaining 6.39 percent and Tibet Summit Resources Co up by 5.59 percent.

“Listed companies that reported profit losses are larger last year [compared with 2016], dealing a blow to market confidence. Also, investors tend to pocket profit prior to the Spring Festival holidays to avoid potential slides,” said Sun Weidang, an analyst at New Times Securities.

The market was little fazed by a private manufacturing survey that showed better-than-expected results in the world’s second-largest economy at the start of 2018, despite tough crackdowns on air pollution and riskier types of financing.

About 26.05 billion shares were traded on the Shanghai exchange, roughly 130.9 percent of the market’s 30-day moving average of 19.90 billion shares a day. The volume in the previous trading session was 20.73 billion.