“China’s stocks fell for a fourth day, the longest stretch of losses in three months, on speculation regulators may resume initial public offerings. Drugmakers, financial stocks and small-company shares dropped.
Kangmei Pharmaceutical Co. (600518) tumbled 3.9 percent, sending a gauge of health-care companies to its lowest level in three weeks. China Life Insurance Co. slid 1.7 percent as shares resumed trading after a suspension. Ping An Bank Co. paced declines for lenders as the China Securities Journal said the banking regulator may stop some banks from operating wealth management businesses if they fail to improve their products.
The Shanghai Composite Index (SHCOMP) slid 1 percent to 2,286.61 at the close, the biggest loss since March 4. The CSI 300 Index declined 1.4 percent to 2,555.61. The ChiNext index of start-ups dropped 3.4 percent, the most since Nov. 27.
“The possibility IPO share sales will resume is spooking the market,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million. “Small-caps will bear the brunt if IPO suspensions are lifted as the majority of the new listings come from small-sized companies. That’ll drag down valuation of small-caps.”
Today’s losses pared the Shanghai Composite’s gain this year to 0.8 percent. Data over the weekend showed industrial output had the weakest start to a year since 2009 and lending and retail sales growth slowed.
“The worry about the strength of the economic recovery persists,” said Wu of Dazhong.
