BEIJING: Chinese stocks fell, with a gauge of mainland companies trading in Hong Kong entering a bear market, as gains in the biggest state-owned companies failed to outweigh a record drop in margin bets.
The Shanghai Composite Index sank for the fourth time in five days, losing 1.3 percent to 3,727.13 at the close, as 16 stocks fell for every one that rose. Technology and health-care shares led losses, while PetroChina Co. surged 4.2 percent on speculation that state funds were buying. Hong Kong’s Hang Seng China Enterprises Index tumbled 20 percent from the May peak.
A flurry of measures to stabilize the market, including a pledge by state-run financial firms to buy 120 billion yuan ($19 billion) worth of shares and a halt to initial public offerings, is failing to stop the rout that erased more than $3.2 trillion of value in less than a month. Traders cut 93.6 billion yuan worth of shareholdings purchased with borrowed money on the Shanghai exchange on Monday, the most since at least 2010.
“The sell-off is continuing as the amount of the government’s stabilization fund isn’t enough to stem the decline,” said Wei Wei, an analyst at Huaxi Securities Co. in Shanghai. “It’s important for the government to stabilize the overall market and recover confidence. If not, small caps will drop further and even big caps might not hold on going forward.”
