* SSEC -0.6 pct, CSI300 -0.8 pct, HSI -0.2 pct
* Start-ups sold off as investors chase solid fundamentals
* Shares of Sunac China tumble on media reports
SHANGHAI, July 18 (Reuters) – China stocks extended losses
on Tuesday morning, as an intense sell-off in small-caps in the
previous session dampened investor confidence despite strong
second-quarter economic growth.
The CSI300 index fell 0.8 percent, to 3,632.99
points at the end of the morning session, while the Shanghai
Composite Index lost 0.6 percent, to 3,156.76 points.
In Hong Kong, the Hang Seng index dropped 0.2
percent, to 26,427.27 points while the Hong Kong China
Enterprises Index lost 0.5 percent, to 10,728.90 points.
Sunac China Holdings shares plunged as much as
13.5 percent in early morning trade, after media reports said
Chinese banks are reviewing the property group’s financial risk.
Wanda Hotel Development, a listed arm owned by the
founder of Dalian Wanda Wang Jianlin, dropped nearly 5 percent
after Reuters quoted sources as saying China has told banks to
stop providing funding for several of the group’s overseas
On mainland exchanges in the morning, 16 stocks – most of
them small-caps – plunged by the 10 percent trading limit.
The tech-heavy start-up board ChiNext slid 0.8
percent. On Monday, it tumbled 5.1 percent to its lowest since
“The slump in major indexes on Monday was mainly driven by
sharp drops in start-up shares, as they forecast continued falls
in profit growth, with heavyweight start-ups leading the profit
decline,” Haitong Securities said in a report.
On Monday, China reported its economy grew an annual 6.9
percent in the second quarter, defying expectations for a slight
loss of momentum.
The growth data helped the Shanghai SE 50 Index,
dubbed China’s “nifty 50”, hit a two-year high on Monday, helped
by the growth data.
The root cause for the divided performances in the SE 50 and
the start-up index, was investors’ preference for solid
fundamentals in a range-bound market, Haitong Securities said.
Analysts also expect MSCI’s decision to include China
shares into its key index to further reinforce investors’ focus
on fundamentals rather than other speculative factors.
Global fund managers are ramping up their presence in China,
aiming to be well ahead of next June’s inclusion of
mainland-listed stocks into MSCI’s benchmark index that is set
to boost investment into the economy’s $8 trillion equity
Most sectors lost ground in the morning, led by banking
and healthcare stocks.
Real estate sector gained 0.9 percent, despite
data showing China’s property market slowed in June as top-tier
Trading in shares of Wanda Film, a mainland
listed arm of Dalian Wanda, remains suspended pending a major
(Reporting by Luoyan Liu and John Ruwitch; Editing by Richard