China stocks fall on concerns about state regulation, economic data | Reuters


SHANGHAI, April 14 China’s main indexes on
Friday had their biggest loss in two weeks amid concerns over
stepped-up regulation and whether an economic recovery could be
losing steam.

The blue-chip CSI300 index fell 0.8 percent to
3,486.50 points, while the Shanghai Composite Index
closed down 0.9 percent to 3,246.07 points.

For the week, CSI300 was down 0.9 percent and the SSEC lost
1.2 percent.

A slew of data this week, including inflation and trade, has
led investors to question the sustainability of the economic

Data showed China’s production price inflation starting to
peak, CPI weaker-than-expected and property sales growth down

“These are definite signs that the reflation trade is
fading,” said Hong Hao, head of research at BOCOM International.

He added that the market had not fully priced in these
changes to the world’s second largest economy, partly because of
suspected government intervention.

On Thursday, 14 Chinese companies suspended trading in their
shares, citing the need to further evaluate the potential impact
on business from plans for a new economic zone at Xiongan. Some
market participants suspect the concerted moves are the result
of regulators’ intervention.

An index tracking major lenders posted its 5th
straight session of losses, after a flurry of moves by
regulators to curb riskier lending activity, including a
crackdown on misdemeanours with a focus on shadow banking.

Xiong’an New Area continued to be the strongest and most
eye-catching investment theme in the market, as China’s
government hopes the economic zone near Beijing will see the
same rapid growth as a zone launched in Shenzhen in 1980.

For the day, sectors fell across the board, led by lenders
and developers, as the country expanded
restrictions on property investment to more cities.
(Reporting by Luoyan Liu and John Ruwitch; Editing by Richard