30 de diciembre de 2015 / 4:45 / en 2 años

China stocks fall on economy, share supply worries; HK also down

* CSI300 -0.3 pct; SSEC: -0.1 pct; HSI: -0.5 pct

* Economic uncertainty and share supply increase worry investors

* China manufacturing activity may have contracted again in Dec

SHANGHAI, Dec 30 (Reuters) - China stocks dipped on Wednesday, undermined by selling in banking and property shares, as traders awaited December manufacturing activity surveys which are expected to show the economy remains sluggish.

Risk appetite was also curbed by the looming expiration next month of a six-month ban on share sales that was imposed on listed companies’ major shareholders during the summer market rout.

The blue-chip CSI300 index fell 0.3 percent to 3,751.59 points by the end of the morning session, while the Shanghai Composite Index lost 0.1 percent to 3,561.14.

Hong Kong shares also edged lower in thin volume. The benchmark Hang Seng index lost 0.5 percent, and the Hong Kong China Enterprises Index fell 1.8 percent.

Qi Yifeng, an analyst at consultancy CEBM, identified two major sources of concern haunting Chinese investors: when will the economy bottom out, and whether the market can withstand a potential equity supply glut next year.

“Next year, there will definitely be a surge in share supply,” Qi said, citing the expiration of the share sale ban and reforms that would make new listings much easier.

“A expansion in insurers’ stock portfolio could help buffer the impact, but the concern is that regulators might curb their investment activities.”

A senior insurance regulator warned on Tuesday that Chinese insurance companies face rising risks from their investments in the country’s volatile stock markets.

Also damping investor sentiment, a Reuters poll showed that activity in China’s manufacturing sector is expected to have contracted for a fifth straight month in December. The official data will be released on Friday, and a similar private survey on Monday.

Most sectors fell, although IT and healthcare stocks were up, reflecting investors’ hopes that moves to restructure the economy would benefit such firms.

Real estate and banking shares dropped sharply as investors scaled back expectations of an imminent cut in banks’ reserve requirement ratios (RRR). The central bank’s chief economist, Ma Jun, wrote on Wednesday that cutting RRR too often and by too much would spur capital outflows.

In Hong Kong, IT was the only main sector that was in positive territory.

Sinotrans Shipping rose 2.7 percent, after the Chinese government on Tuesday approved the absorption of the firm’s parent, Sinotrans & CSC, into state-owned China Merchants Group.

Reporting by Samuel Shen and Nathaniel Taplin; Editing by Kim Coghill

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