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Shanghai index down 0.15%, led by distillers, miners
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Shanghai stocks ended lower today, dragged down by distilleries and coal miners, amid concerns about new share offerings and liquidity squeeze.
The benchmark Shanghai Composite Index dropped 0.15 percent, or 2.98 points, to 2,044.34. Daily turnover was 62.9 billion yuan (US$10.3 billion).
“Market performance was constrained by new IPOs,” Du Changchun, analyst with Northeast Securities Co Ltd, said in a note today. “Investors still favor new listings after more than one year’s suspension. This will divert funds from existing shares.”
“But tepid trading indicates investors are unwilling to buy as they are still worried about liquidity and economic slowdown,” Du said.
Two Chinese companies launched their IPOs today and six more will do so this week.
The market declined today despite a new move by the China Insurance Regulatory Commission to allow insurers to invest in blue-chip shares listed on the ChiNext board of the Shenzhen Stock Exchange.
Distilleries led the market down. Kweichow Moutai Co Ltd, China’s leading producer of high-end liquor, lost 1 percent to 119.40 yuan. Shanxi Xinghuacun Fen Wine Factory Co Ltd dropped 3.6 percent to 17.78 yuan.
Coal stocks also fell. China Shenhua Energy Co Ltd, China’s largest coal miner, lost 1.8 percent to 14.56 yuan. Shanxi Coal International Energy Group Co Ltd decreased 3 percent to 4.42 yuan.
Technology shares gained following a surge of its peers on the Shenzhen market, with the ChiNext soaring 3.9 percent to 1,405 points.
Insigma Technology Co Ltd jumped by the daily limit of 10 percent to 5.62 yuan. China National Software & Service Co Ltd rose 6.6 percent to 39.63 yuan.
“Allowing insurers to invest in stock market is part of the regulator’s commitment to attract long-term investment to the equity market. That would help hedge the downward pressure from the resumption of IPOs,” Shenyin & Wanguo Securities said.
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