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China stocks fall on weaker property, Hong Kong slips too
June 4, 2014 / 5:01 AM / 4 years ago

China stocks fall on weaker property, Hong Kong slips too

* HSI -0.6 pct, H-shares -0.6 pct, CSI300 -1.2 pct

* China property sector down on concerns about price cuts

* Environment-protection firms surge on steps to curb pollution (Updates to midday)

By Grace Li

HONG KONG, June 4 (Reuters) - China shares sank on Wednesday, led by losses in property counters as investors fretted that soft demand for new homes in the mainland could cut prices and hurt developers.

Hong Kong shares slipped from Tuesday’s five-month high as some investors took profit after recent strong gains.

At midday, the Hang Seng Index and the China Enterprises Index of the top Chinese listings in Hong Kong both were down 0.6 percent. The Hang Seng was at 23,161.43 points.

The CSI300 of the leading Shanghai and Shenzhen A-share listings shed 1.2 percent, while the Shanghai Composite Index was off 0.9 percent at 2,019.22 points.

Mark To, head of research at Wing Fung Financial Group, said the improving Chinese economy is helping boost sentiment about the Hong Kong market.

But on Tuesday, when mainland media reports cited soft property demand in the mainland, property developers fell.

China Fortune Land, the top CSI300 percentage loser, tumbled 7 percent. China Vanke lost 2.3 percent, even though the country’s biggest residential property developer said late Tuesday its January-May contract sales were up 16.2 percent from a year earlier.

Hong Kong-listed peers followed, with China Overseas Land & Investment down 2.2 percent and China Resources Land down 1.8 percent.

Faced with slowing sales and funding issues for some property developers, China’s real estate market has softened this year after last year’s stellar performance. Prices rose at their slowest pace in 11 months in April.

No improvement was seen in May and record-low turnover in major cities during the past holiday weekend added to concerns that an oversupply in the housing market will result in more price cuts, mainland media reported.

On Tuesday, environmental protection-related counters rose sharply. Combustion Control Technology surged the maximum allowed 10 percent and CNlight gained almost 10 percent.

China is considering an absolute cap on its CO2 emissions from 2016, a senior adviser to the government said on Tuesday. On Friday, the central government released stricter emission standards, which take effect in July.

Inner Mongolia Yili Industrial Group rebounded 1.5 percent from Tuesday’s big drop after the company said all its factories which produce infant formula had secured licenses, denying a report on Tuesday that four of its subsidiaries failed to make the latest list of qualified infant formula producers. (Editing by Richard Borsuk)

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