July 8, 2019 / 7:34 AM / 9 days ago

China stocks fall as U.S. rate cut expectations ease; new listings weigh

* Shanghai Composite -2.6%; CSI300 -2.3%

* STAR Market listings drag on tech shares

SHANGHAI, July 8 (Reuters) - Chinese stocks fell on Monday, with the benchmark Shanghai Composite index posting its biggest daily loss in more than two months, as investors scaled back expectations for sharp U.S. rate cuts and a slew of new listings this week weighed on tech shares. ** At the close, the Shanghai Composite index was down 2.58% at 2,933.36, in its biggest daily loss since May 6. ** The blue-chip CSI300 index was down 2.32%, its biggest daily loss since May 17. The financial sector sub-index fell 2.21%, the consumer staples sector lost 1.19%, the real estate index retreated 1.89% and the healthcare sub-index gave up 1.94%. ** The smaller Shenzhen index ended down 2.9% and the start-up board ChiNext Composite index was weaker by 2.654%. ** Huatai Securities analysts said they expected markets to remain relatively stable as despite an initial surge last week prompted by a better-than-expected G20 outcome, “a turning point in fundamentals has not yet arrived”. With mid-year corporate reports due soon, “results could become the biggest impetus for the market in the near-term,” they said in a note. ** “With the Sino-U.S. relaxation and the opening of the gates to the STAR Market, investors should watch tech shares in the interim. But with the concentration of new listings this week, investors should be on guard against the impact on market liquidity,” the analysts said. ** Twenty-two companies are set to conduct initial public offerings this week, of which 21 are on China’s new high-tech STAR Market. The Shanghai Stock Exchange said on Friday that the trading in shares of the first batch of companies on the STAR Market would begin on July 22. ** Computer firms slumped 3.96% and IT firms dropped 3.72%. ** Weakness on Monday was also related to new U.S. nonfarm payroll data, said Cao Xuefeng, head of research at Huaxi Securities in Chengdu. “U.S. nonfarm data wasn’t bad, and it has lowered the likelihood that the Fed cuts rates in July,” he said. Some analysts believe China could follow the Fed by cutting rates in July. ** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 1.42%, while Japan’s Nikkei index closed down 0.98%. ** At 07:17 GMT, the yuan was quoted at 6.8881 per U.S. dollar, 0.09% firmer than the previous close of 6.894. ** The largest percentage gainers in the main Shanghai Composite index were Jiangsu Boxin Investing & Holdings Co Ltd , up 10.02%, followed by Shenzhen Sunxing Light Alloys Materials Co Ltd, gaining 9.99%, and Danhua Chemical Technology Co Ltd, up by 9.93%. ** The largest percentage losers in the Shanghai index were Guangdong Liantai Environmental Protection Co Ltd down 10.02%, followed by Seazen Holdings Co Ltd, losing 10.01%, and Zhejiang Tuna Environmental Science & Technology Co Ltd, down by 10.01%. ** So far this year, the Shanghai stock index is up 17.6% and the CSI300 has risen 26.3%, while China’s H-share index listed in Hong Kong is up 5.8%. Shanghai stocks have declined 1.53% this month. (Reporting by Andrew Galbraith; Editing by Subhranshu Sahu)

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