Stocks fall as Xiongan trade fails to hold up buckling indexes

Chinese mainland stocks fell on Monday as strong gains in listed companies that stand to benefit from the country’s new economic zone were offset by weakness in other sectors after the securities regulator vowed to punish stingy “iron roosters.”

The blue- chip CSI 300 index fell 0.35 percent to 3,505.14 points.

The benchmark Shanghai Composite Index declined 0.52 percent to 3,269.39 points, while the Shenzhen Component Index finished 0.62 percent lower at 10,603.28 points.

Dozens of newly listed stocks and counters expected to issue bonus shares instead of paying cash dividends were hard hit, plunging by the maximum allowed 10 percent limit, after the nation’s top securities regulator urged listed companies to reward investors with cash dividends.

On the other hand, investors, unfazed by the regulator’s effort to cool speculative fever, continued to chase stocks related to Xiongan New Area, a recently announced new zone in North China’s Hebei Province.

More than 20 stocks related to the new plan surged 10 percent for the fourth consecutive session, with more participants rushing into the investment theme by selling elsewhere.

But Zhang Qi, an analyst at Haitong Securities, said some believed Xiongan concept stocks were starting to lose steam.

Zhang said some profit taking was to be expected after Shanghai stocks had their best week since November 2016.

Sectors were mixed. Gains were led by real estate stocks, while consumer and healthcare shares dragged.

Share prices in steel maker Hesteel, developer China Fortune Land Development and infrastructure operator Beijing Capital shot up 10 percent for the fourth straight session. The companies are widely seen benefiting from the future development of Xiongan New Area.