China stocks sag on property curbs, slowdown fears
SHANGHAI: China stocks fell yesterday, as developers slumped after a new round of government curbs to rein in the heated housing market.
The blue- chip CSI300 index fell 0.5 per cent, to 3,817.79 points, while the Shanghai Composite Index lost 0.3 per cent to 3,341.55 points.
Property firms were the biggest drag in the market, with an index tracking major developers tumbling 5.1 per cent in its worst day since early 2016.
A number of provincial capitals across China have rolled out new measures to further slow home property sales, and bear down on lingering speculators that could destabilise markets ahead of a key Communist Party congress next month.
There were also signs the authorities are stepping up their efforts to crack down on illegal lending to the sector.
Investor sentiment was also undermined by simmering concerns that China’s beefed- up environmental protection could reduce demand, and consequently economic growth.
UBS strategist Gao Ting said that some top- down investors now anticipate a slowdown in China’s GDP growth, and worry about the sustainability of the global economic recovery.
Although China’s supplyside reforms and tighter envi ronmental protect ion measures have so far been well received by the market, “some investors now worry that these measures have started hurting demand,” Gao wrote in his latest strategy report.
He said stronger environmental protections could force many smal ler resource f irms to halt product ion, af fecting investment, whi le surging upstream costs may finally pass through to consumer goods and services, undermining demand. — Reuters