October 18, 2018 / 5:17 AM / a month ago

China shares fall on weak sentiment; Shanghai at near 4-yr low

* SSEC -2.0 pct, CSI300 -1.5 pct, HSI -0.2 pct

* Social financing data dip seen as failing to support sentiment

* Shenzhen, small-cap, start-up indexes likely oversold - analysts

SHANGHAI/HONG KONG, Oct 18 (Reuters) - China stocks dropped on Thursday, while the Shanghai Composite index touched its lowest in nearly four years, amid investor concerns about lean domestic growth with the country’s premier warning of increasing downward pressure.

** At the midday break, the Shanghai Composite index was down 51.00 points or 1.99 percent at 2,510.62, after touching its lowest since Nov. 24, 2014. ** China’s blue-chip CSI300 index was down 1.51 percent, with its financial sector sub-index down by 1.26 percent, the consumer staples sector slipped 1.48 percent, the real estate index lost 1.52 percent and the healthcare sub-index falling 2.5 percent.

** China’s economy faces increasing downward pressure, and the government will take targeted measures to prevent large fluctuations in growth, Premier Li Keqiang said. ** “The market index is already close to its 20-year moving average of 2,450 points, an important support level. The Shenzhen, small-cap and start-up indexes ... are already heavily oversold, so a rebound could happen any time,” analysts at Donghai Securities said in a note. ** “In a bearish market, market participants tend to ignore good news, and react to bad news,” said a Beijing-based trader, who attributed Thursday’s fall to energy stocks’ performance, dragged down by falling oil prices. ** China’s new bank loans rebounded in September after dipping in the two previous months, central bank data showed, but overall credit conditions stayed tight in an economy chilled by an ongoing tariff war with the United States. ** “The overall falling trend of total social financing growth remains unchanged, and the loosening of the credit situation that the market has been waiting for has not appeared,” analysts at Pingan Securities said in a note. ** Chinese H-shares listed in Hong Kong dropped 0.73 percent to 10,123.67, while the Hang Seng Index slipped 0.15 percent to 25,424.27. ** The smaller Shenzhen index slipped 1.67 percent and the start-up board ChiNext Composite index edged 0.87 percent lower. ** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.37 percent, while Japan’s Nikkei index was down 0.75 percent. ** The yuan was quoted at 6.936 per U.S. dollar, 0.18 percent weaker than the previous close of 6.9235. The U.S. government on Wednesday refrained from naming China as a currency manipulator in a twice-yearly Treasury department report. ** The largest percentage gainers in the main Shanghai Composite index were Jiangsu Xinquan Automotive Trim Co Ltd, which gained as much as 10.03 percent, followed by Wuxi New Hongtai Electrical Technology Co Ltd, which climbed 10.02 percent and Zhejiang Chenfeng Technology Co Ltd , which rose 10 percent. ** The largest percentage losses in the Shanghai index were Shanghai Lansheng Corp, which slipped as much as 10.03 percent, followed by Kangmei Pharmaceutical Co Ltd , which lost 10.01 percent and Geo-Jade Petroleum Corp, which fell 10 percent. ** So far this year, the Shanghai stock index is down 22.54 percent, while China’s H-share index is down 12.9 percent. Shanghai stocks have declined 9.21 percent this month. ** The top gainers among H-shares were China Gas Holdings Ltd , which gained as much as 4.61 percent, followed by People’s Insurance Group of China Co Ltd, which climbed up to 3.56 percent and PICC Property and Casualty Co Ltd , which rose 2.76 percent. ** The three biggest H-shares percentage decliners were Great Wall Motor Co Ltd, which fell 3.70 percent, China Petroleum & Chemical Corp, which lost 3.7 percent and Dongfeng Motor Group Co Ltd, which slipped 3.2 percent. ** About 7.25 billion shares have traded so far on the Shanghai exchange, roughly 60.8 percent of the market’s 30-day moving average of 11.93 billion shares a day. The volume traded was 13.00 billion shares, as of last trading day. ** At midday, China’s A-shares were trading at a premium of 21.66 percent over the Hong Kong-listed H-shares. ** The Shanghai stock index is below its 50-day moving average and below its 200-day moving average. ** The price-to-earnings ratio of the Shanghai index was 10.98, as of last trading day, while the dividend yield was 2.9 percent. ** So far this week, the market capitalisation of the Shanghai stock index slipped 1.59 percent to 27.36 trillion yuan. ** In Hong Kong, the sub-index of the Hang Seng index tracking energy shares dipped 2.5 percent, while the IT sector fell 0.8 percent. The top gainer on Hang Seng was Sands China Ltd, up 2.55 percent, while the biggest loser was China Petroleum & Chemical Corp, which was down 3.68 percent.

Reporting by Andrew Galbraith and Noah Sin, Editing by Sherry Jacob-Phillips

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