SHANGHAI, Aug 31 (Reuters) - China stocks erased gains to close lower on Monday, dragged by financials and healthcare firms, after investors booked profits as major indexes approached key resistance levels.
** The blue-chip CSI300 index fell 0.6% to 4,816.22, after hitting a more than five-year high in morning session, while the Shanghai Composite Index slipped 0.2%to 3,395.68, trading not far below a two-and-a-half-year high hit in mid-July.
** The tech-heavy start-up board ChiNext lost 1.1%, while the STAR50 index added 0.7%.
** Currently, chances are low for the A-share market to stage a continued rally, as there is still a strong resistance around major indexes’ previous highs hit in mid-July, China Fortune Securities’ analyst Yan Kaiwen said.
** Leading the losses, the CSI300 financials index and the CSI300 healthcare index shed 1% and 0.9%, respectively.
** Heavyweight banking shares declined after major banks reported their biggest profit falls in at least a decade and an increase in soured loans.
** Investors also pulled out of liquor makers which surged to all-time highs over worries about lofty valuations.
** The CSI liquor index ended 0.6% higher, after jumping as much as 3.3% on gains for industry bellwethers.
** The rally in liquor makers has deviated from those companies’ fundamentals, as their high valuations have more than reflected their earnings growth, China Fortune Securities’ Yan said.
** China’s factory activity grew at a slower pace in August as floods across southwestern China disrupted output, but the services sector expanded at a solid rate in a boost to the economy.
** But some analysts fear that the recovery could stall, hurt by rising tensions between Washington and Beijing and on possibility of another wave of local infections in the winter. (Reporting by Shanghai Newsroom; editing by Uttaresh.V)
Nuestros Estándares: Los principios Thomson Reuters.