December 14, 2016 / 7:17 AM / 2 years ago

China stocks slip ahead of Fed rate decision

SHANGHAI, Dec 14 (Reuters) - China stocks closed at one-month lows on Wednesday, after regulators pledged to restrict risky investments by insurers, sapping already weak risk appetites ahead of a widely expected interest rate hike by the Federal Reserve.

The blue-chip CSI300 index fell 0.8 percent, to 3,378.95 points, while the Shanghai Composite Index lost 0.5 percent to 3,140.53 points.

China’s star-up stocks index dropped 1.1 percent, hovering near a six-month low plumbed on Tuesday.

Rattling investors was news that China’s insurance regulator will soon announce new rules to tighten control over insurance companies’ risky stock bets.

Xiang Junbo, head of China’s insurance watchdog, on Tuesday warned that insurers should be long-term money providers and not short-term capital market “savages”.

Most sectors lost ground on Wednesday, led by real estate and infrastructure shares, which rallied the most previously on insurers’ heavy buying.

Gains were only seen in banks and energy plays. (Reporting by Luoyan Liu and John Ruwitch; Editing by Richard Borsuk)

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