SHANGHAI: China stocks sagged on Tuesday as investor excitement over a weekend interest rate cut waned, with a flood of new initial public offerings (IPO) fanning concerns about tighter liquidity.
With no fresh stimulus expected during this week’s National People’s Congress (NPC), investors are shifting their eyes to economic fundamentals and near-term liquidity as 24 companies won regulatory approval late on Monday to launch IPOs.
“The rate cut was expected, and it shows that the economy is rather poor,” said Hou Yinmin, strategist of AJ Securities.
“I don’t see signs of fresh money flowing into the stock market so new IPOs would have some pressure on liquidity.”
The CSI300 index fell 1.2 percent to 3,558.97 points in morning trade, while the Shanghai Composite Index lost 0.9 percent to 3,305.45 points. Both indexes are approaching January highs, which are seen by analysts as a strong resistance level.
