HONG KONG, July 16: China shares slid on Tuesday, weighing on Hong Kong as both markets traded narrowly, with financial and property stocks dampened by an official news report saying quarterly or annual growth of below 7 percent was acceptable.
By midday, the CSI300 of the leading Shanghai and Shenzhen A-share listings was down 0.6 percent, while the Shanghai Composite Index shed 0.7 percent. Both stayed in the same 60-point range for a third session.
The Hang Seng Index was down 0.1 percent at 21,287.4, while the China Enterprises Index of the top Chinese listings in Hong Kong slipped 0.2 percent as turnover stayed anemic.
‘If it’s true that 7 percent is the new base economic growth case, then it would greatly diminish chances that Beijing will even move to support the economy and this is a negative for the market,’ said Cao Xuefeng, a Chengdu-based analyst with Huaxi Securities.
The official China Securities Journal reported on Tuesday in a front page editorial that quarterly or annual economic growth rates of below 7 percent would not affect China’s long-term goal of structural adjustment.
This comes a day after data showed the world’s second-largest economy grew 7.5 percent in the second quarter, a figure broadly in line with China’s official annual growth target.
The mainland’s press also reported that the economy was likely to dominate the State Council’s regular Wednesday meeting. Traders said there was some speculation that China’s cabinet could unveil some policy announcements after that.
China Minsheng Bank fell 1.3 percent in Shanghai and 0.3 percent in Hong Kong. The country’s second-largest lender China Construction Bank (CCB) shed 0.7 percent in Hong Kong.
Chinese property and construction-related sectors were hurt by more reports in the mainland press about the possibility of the eastern city of Hangzhou starting a property tax trial, after Shanghai and Chongqing.
China Vanke, the country’s largest property developer by sales and due to report interim earnings this Friday, tumbled 2.2 percent in Shenzhen. Poly Real Estate fell 2.6 percent in Shanghai, leading the Shanghai property sub-index down 2.2 percent.
China Pacific Insurance Co Ltd far outperformed sector rivals on the day, jumping 2 percent in Hong Kong after posting favorable monthly premium growth data. Ping An Insurance slipped 0.5 percent, while China Life Insurance edged up 0.13percent.
NetDragon dived 17.7 percent in Hong Kong after Baidu Inc, China’s top search engine, said it plans to acquire app store 91 Wireless from NetDragon for $1.9 billion to strengthen its foothold in the country’s highly competitive mobile computing sector.
(agencies)
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