BEIJING: China stocks corrected on Monday morning after a 10 percent rally over the past two sessions, as regulators took fresh measures to crack down on speculation and trading misbehaviors.
The blue-chip CSI300 index .CSI300 fell 2.8 percent, to 3,247.39 points at the end of the morning session, while the Shanghai Composite Index .SSEC lost 2.6 percent, to 3,148.08 points.
Both indexes are set to fall over 14 percent for the month, their third straight monthly declines.
Trading in index futures CIFc1 was relatively calm compared with last week, after regulators took additional steps over the weekend to restrict speculative trading.
Hong Kong stocks also fell after losing the bounce seen late last week.
“A pull back in the market was to be expected as some investors are taking profits after the two days rally,” wrote Gerry Alfonso, director of Shenwan Hongyuan Securities.
“Investors seem to be waiting until the manufacturing PMI figure is released later this week before making significant decisions.”
Investors remained worried over the health of the economy, as first-half profit growth at China’s listed companies slowed to 8.7 percent, from 10 percent a year earlier, official Shanghai Securities News reported on Monday.
Reflecting waning risk appetite, outstanding margin loans – money investors borrow to buy stocks – fell for the ninth consecutive session on Friday in Shanghai to 683.1 billion yuan, reaching the lowest level since December.
