China stocks slump as huge IPO wave lands
SHANGHAI, June 18 (Reuters) - China stocks tumbled on Thursday, led by banking heavyweights, as 11 companies launched IPOs, putting pressure on market liquidity.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen slumped 4.1 percent, to 4,930.55, while the Shanghai Composite Index lost 3.7 percent, to 4,785.36 points.
The 11 companies - including brokerage giant Guotai Junan Securities - started taking investor subscriptions for their initial public offerings, and nine will follow suit on Friday, tying up more liquidity.
"Today is a particularly IPO-heavy day," wrote Gerry Alfonso, director at Shenwan Hongyuan Securities Co. "This was clearly going to have an impact on the market."
Chinese investors have become increasingly cautious after an eight-month-long bull run made the country's stock market the world's best-performing, and the most heavily traded.
Seven out of 10 global investors say China's equity market is in a "bubble", according to a Bank of America Merrill Lynch fund manager survey.
On Thursday, some investors took profit from banking shares after the previous session's jump, knocking the CSI300 bank index down 4.4 percent.
The sector rose sharply on Wednesday on hopes of ownership structure reforms in state lenders.
Real estate stocks outperformed the market, down 2 percent, after data showed China's new home prices rebounded nationwide for the first time in 13 months in May from April, offering hope the property downturn is bottoming out.
But transport stocks rose, after the government said it would step up "effective investment" in key sectors, including rural power infrastructure, to support growth.. (Reporting by Samuel Shen and Pete Sweeney; Editing by Richard Borsuk)
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