BEIJING: Chinese stocks dropped from their highest level in three weeks on concern the rebound in equities has overshot prospects for earnings growth.
The Shanghai Composite Index lost 1.5 percent to 3,935.33 at the noon-time break. The gauge climbed 14 percent from its July 8 low through Monday mid unprecedented state intervention following a $4 trillion rout. Utilities, industrial companies and commodity producers led declines Tuesday. The Hang Seng China Enterprises Index fell 0.2 percent to its lowest level in eight months in Hong Kong.
“The 4,000-point level is a temporary ceiling that’s hard to break through now, unless there are some catalysts such as further government support for equities or the bottoming-out of the economy,” said Wei Wei, an analyst at Huaxi Securities Co. in Shanghai.
The securities regulator said Friday the China Securities Finance Corp. will reduce its intervention in the stock market as volatility falls. Industrial production, investment and retail have all trailed analyst estimates, data this month showed. New-home prices rose in 31 cities of the 70 the government monitors, from 27 the previous month, the statistics bureau said Tuesday.
