Mainland stocks skid on regulatory moves

Stocks on the Chinese mainland skidded more than 1 percent on Monday on worries that slowing credit growth and tightening regulatory requirements will start to weigh on the Chinese economy later in the year.

The blue-chip CSI300 index fell 1.61 percent to 3,808.86 points, while the Shanghai Composite Index lost 1.53 percent to 3,110.65 points, extending losses from Friday and sharply underperforming the rest of Asia.

Real estate and financial firms led the declines in the mainland markets as Chinese authorities continue to tighten the screws on riskier types of financing in a bid to reduce systemic risks.

First-quarter GDP data on Tuesday is expected to show the economy carried most of its growth momentum from last year into early 2018.

“The concern over China’s economy lingers as financing activities by the real estate sector and local governments have been restricted amid the central government’s deleveraging campaign,” China Merchants Securities wrote in a report.

Bucking the broad trend, shares in firms based in South China’s Hainan Province surged after the country said it plans to set up an international free trade zone and port on the southern island.

The largest percentage gainer in the main Shanghai Composite Index was China Hainan Rubber Industry Group Co up 10.03 percent.

The largest percentage losers in the Shanghai index were Shanghai Hongda Mining Co down by 10.02 percent, followed by Shanghai Feilo Acoustics Co down 10.01 percent and Taiyuan Lionhead Cement Co also losing 10.01 percent.