Shanghai stocks end weaker as tighter regulations bite

Published May 22, 2017

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Shangai - Shanghai stocks reversed

earlier gains to end lower on Monday as lingering worries over

economic growth and tighter regulations to curb speculative

investments hurt risk appetite.

The blue-chip CSI300 index rose 0.2 percent, to

3,411.24, while the Shanghai Composite Index lost 0.5

percent to 3,075.68 points.

The market has been hobbled over the past few weeks by fears

of renewed economic slowdown and heavy-handed regulation aimed

at limiting broad financial risks.

The official think tank State Information Centre said over

the weekend that China's economy will likely expand around 6.8

percent in the second quarter of 2017, compared with 6.9 percent

in the first quarter. "Overall, China's economy will remain

stable but with a slightly slowing trend," it said.

"When growth is going well, they (the Chinese government)

start to withdraw a little bit of liquidity, start to raise

rates a little bit," said Will Ballard, head of emerging markets

and Asia Pacific equities at Aviva Investors, referring to

Beijing's stepped up campaign to clean up the financial sector.

Read also:  China stocks plummet to 1-year low 

Over the weekend, China's securities regulator meted out

punishment to brokerage Sealand Securities and mutual fund house

Sinvo Fund Management Co for their lax internal management.

An index tracking major brokerage firms closed

down 1.2 percent at a 14-month low. Property shares also lost ground, after more

cities announced fresh restrictions on home purchases.

For the day, around 30 newly-listed stocks tumbled by the

maximum allowed 10 percent as expectations of more equity supply

pressured their valuations.

China is expected to approve up to 500 IPOs to raise as much

as 300 billion yuan in 2017, according to an official with the

Shanghai Stock Exchange.

(Reporting by Luoyan Liu and John Ruwitch; Editing by

Jacqueline Wong)

Reuters

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