SHANGHAI, July 4 (Reuters) – China stocks fell on Tuesday,
led down by the blue-chip index that some analysts say has been
due for a correction after rallying strongly on inclusion of
Chinese shares in a key MSCI index.
The blue-chip CSI300 index fell for the third
session, dropping 0.8 percent to 3,619.98 points.
The Shanghai Composite Index lost 0.4 percent to
“The recent correction is technical as blue-chips had far
outperformed the broader market this year, but we see little
chances for a major downturn in industry-leading big-caps as
they are not overvalued,” said Xu Wei, an analyst with Hongxin
The robust trend in China’s “nifty 50”, the 50 most
representative blue-chips in Shanghai, is broadening to the
so-called “MSCI222”, and investors could explore opportunities
in blue-chips with solid fundamentals as rotation into them is
clear, Xu added.
U.S. index provider MSCI last month decided to add 222
China-listed stocks to its Emerging Markets Index, tracked by
around $1.6 trillion.
The inclusion is widely expected to benefit long-term
development of China’s stock market.
Worries over tight liquidity conditions have eased after the
mid-year macro-prudential assessment (MPA), although sellers
have been pressuring Chinese markets over the past week or so on
lingering fears of a cash crunch and slowing economic growth.
On Tuesday, sectors contracted across the board, led by
consumer and real estate stocks.
(Reporting by Luoyan Liu and John Ruwitch; Editing by Richard