July 8, 2019 / 4:49 AM / 13 days ago

China shares drop amid trade, policy uncertainty; tech stocks drag

* SSEC -2.5%, CSI300 -2.3%, HSI -1.6%

* Hong Kong H-shares down 1.64%

* New STAR Market listings weigh on tech shares

SHANGHAI, July 8 (Reuters) - China shares fell on Monday amid continued investor uncertainty over the outlook for Sino-U.S. trade, monetary policy and corporate earnings, while tech firms came under pressure ahead of listings on China’s new high-tech board.

** At the midday break, the Shanghai Composite index was down 2.46% at 2,936.97 points. ** China’s blue-chip CSI300 index was down 2.28%, with its financial sector sub-index lower by 2.19%, the consumer staples sector slipped 1.35%, the real estate index fell 2.13% and the healthcare sub-index down 2.14%. ** Chinese H-shares listed in Hong Kong dropped 1.63% to 10,717.99, while the Hang Seng Index was down 1.64% at 28,301.77. ** The smaller Shenzhen index was down 2.66% and the start-up board ChiNext Composite index was weaker by 2.56%. ** Analysts at Huatai Securities said they expect 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 company mid-year 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 could 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. ** At least 22 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 will begin on July 22. ** Computer firms slumped 3.47% and IT firms dropped 3.31%. ** Investors are also closely watching watching the U.S. economy, where stronger-than-expected nonfarm payrolls data tempered expectations that the Federal Reserve will aggressively ease rates at its July meeting. ** “Whether the Fed can begin cutting rates in July is crucial. This will decide the degree of monetary easing in China and impact the height of the recovery in A-shares,” analysts at Lianxun Securities said in a note. ** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 1.30%, while Japan’s Nikkei index was down 0.89%. ** The yuan was quoted at 6.8908 per U.S. dollar, 0.05% firmer than the previous close of 6.894. ** The largest percentage gainers in the main Shanghai Composite index were Harbin High-Tech Group Co Ltd, up 9.96%, followed by Danhua Chemical Technology Co Ltd, gaining 9.93% and Weifang Yaxing Chemical Co Ltd, up by 9.92%. ** The largest percentage losses in the Shanghai index were Jiangsu Boxin Investing & Holdings Co Ltd, down 10.02%, followed by Guangdong Liantai Environmental Protection Co Ltd, losing 10.02% and Seazen Holdings Co Ltd , down by 10.01%. ** So far this year, the Shanghai stock index climbed 20.74%, while China’s H-share index rose 7.6%. Shanghai stocks gained 1.08% so far this month. ** The top gainers among H-shares were Guangdong Investment Ltd , up 1.13% and PICC Property and Casualty Co Ltd , gaining 0.35%. ** The three biggest H-shares percentage decliners were ANTA Sports Products Ltd, down 7.32%, CSPC Pharmaceutical Group Ltd, which fell 3.4% and Anhui Conch Cement Co Ltd, which lost 3.2%. ** In Hong Kong, the sub-index of the Hang Seng index tracking energy shares dipped 1.9%, while the IT sector dropped 1.8%. The top gainer on the Hang Seng was China Mobile Ltd, up 0.71%, while the biggest loser was Wharf Real Estate Investment Company Ltd, which slumped 4%.

Reporting by Andrew Galbraith, Editing by Sherry Jacob-Phillips

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