Stocks fall on liquidity fears

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December 24, 2015

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By Leng Cheng | December 24, 2015, Thursday |

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SHANGHAI shares fell from a four-month high yesterday, halting two days of gains, as investors rushed to take profits amid liquidity fears.

The Shanghai Composite Index retreated 0.43 percent to 3,636.09 points at close, erasing as much as 0.88 percent gains made earlier in the day.

Five companies started taking subscriptions yesterday for their initial public offerings, leading to a late-afternoon sell-off.

The subscriptions are expected to lock up 1.7 trillion yuan (US$262 billion) — the biggest amount among the latest round of floats since November.

Sentiment was initially upbeat in the morning amid fresh signs that cash-rich insurers were on a shopping spree at the year end, buying big caps.

Some traders said the rally in blue chips was still sustainable though small caps could weaken further.

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