July 29, 2016 / 4:31 AM / 2 years ago

China stocks slip as regulatory clampdown knocks small caps, HK also lower

* CSI300 -0.1 pct, SSEC -0.1 pct

* His -0.8 pct, HSCE -0.7 pct

SHANGHAI, July 29 (Reuters) - Chinese stocks slipped on Friday as investors dumped small cap stocks amid signs of a fresh regulatory clampdown on rampant speculation.

The CSI300 index fell 0.1 percent to 3,217.78 points at the end of the morning session, while the Shanghai Composite Index lost 0.1 percent to 2,992.32.

China CSI300 stock index futures for August were flat at 3,193.6, 24.18 points below the current value of the underlying index and suggesting investors are expecting further losses.

Among other moves, China is considering rules to restrict investments by small banks in the $3.5 trillion wealth management product (WMP) industry, draft rules seen by Reuters earlier this week showed. That could curb their purchases of equities and other riskier assets.

“Recent regulatory moves to clean the market will first and foremost hit excessively valued small caps,” said Xiao Shijun, analyst at Guodu Securities in Beijing.

“However, stability in blue-chips helped offset the negative impact of sales in small counters this morning. The trend is likely to continue next week, keeping the indexes in tight ranges.”

Small-cap Xinjiang Xuefeng Sci-Tech (Group) Co Ltd was the morning’s biggest faller in Shanghai, tumbling 7.6 percent after forecasting net profit would decrease 84.4 percent in the first half of this year from the same period a year earlier.

Tianjin Printronics Circuit Corp was Shenzhen’s top loser, slumping by the 10-percent daily limit after the loss-making firm said it was scrapping an asset restructuring plan.

Total volume of A shares traded in Shanghai was 8.61 billion shares, while Shenzhen volume was 9.59 billion shares.


Hong Kong stocks extended early losses in line with regional markets after the Bank of Japan announced only a modest easing in policy, disappointing investors.

The Hang Seng index dropped 0.8 percent to 21,991.94.

Total trading volume of companies included in the HSI index was 0.7 billion shares.

Shares of casino operator Wynn Macau fell nearly 5 percent after its parent Wynn Resorts announced a smaller-than-expected allocation of new tables for its new $4.2 bln casino.

The Hong Kong China Enterprises Index lost 0.7 percent to 9,021.87.

The index measuring price differences between dual-listed companies in Shanghai and Hong Kong stood at 128.10.

A value above 100 indicates Shanghai shares are pricing at a premium to shares in the same company trading in Hong Kong, and vice versa.

The northbound quota for the Hong Kong-Shanghai Stock Connect, currently set at 13 billion yuan, saw net inflows of 0.14 billion yuan.

Reporting by Lu Jianxin and Nathaniel Taplin; Editing by Kim Coghill

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