BEIJING: Shares in mainland China slid on concern over regional geopolitical tension and the stock regulator’s call for stricter supervision of companies. The Shanghai Composite Index declined 0.7 percent to 3,222.17 at the close, the lowest level since March 30. Utilities and materials shares were among the biggest decliners. China Fortune Land Development Co. slumped by the 10 percent daily limit as the heat came out of a rally in stocks linked to a new economic zone near Beijing. Trading in Hong Kong’s stock market will resume on Tuesday after a holiday. Tension between Washington and Pyongyang has escalated in recent weeks, unnerving Asian markets. U.S. President Donald Trump is willing to consider “kinetic” military action, including a sudden strike to counteract North Korea’s series of destabilizing actions, said two people familiar with the White House’s thinking. Traders also said that a speech by China’s securities regulator Liu Shiyu, in which he called for stricter supervision of mainland companies and urged exchanges to punish market irregularities “without mercy”, weighed on sentiment on Monday.
“China’s financial regulation coupled with geopolitical risks surrounding North Korea have heightened risk aversion and put pressure on stocks,” said Ken Chen, an analyst at KGI Securities Co. in Shanghai. “The downside should be limited as first-quarter figures showed economic fundamentals remained sound.” The world’s second-largest economy expanded 6.9 percent in the Jan.-March period, data released Monday showed, above the median estimate for a 6.8 percent gain in a Bloomberg survey. March industrial output, retail sales and fixed asset investment also beat economists’ estimates.
