China’s major indexes fell on Monday morning, dented by expectations of a new wave of initial public offerings and by profit-taking in consumer firms. The CSI300 index was down 0.3 percent, to 4,009.78 points at the end of the morning session, while the Shanghai Composite Index lost 0.7 percent, to 3,392.03 points. If the Shanghai index doesn’t rise in the afternoon, Monday will be its worst day since Aug. 11.
Over the weekend, China’s securities regulator approved nine IPOs that will raise a total of 9.5 billion yuan ($1.43 billion), more than double the average funds raised in the past weeks. That sparked fears more equity supply could come onto the market, pushing the tech-heavy start-up index ChiNextp 1.4 percent lower. “Investors shall be wary after strong gains in major indexes and handsome rates of return for institutional investors this year,” Haitong Securities wrote in a report.
In the short term, market participants will watch factors including domestic financial regulations, balance sheet shrinking and rate hikes by the U.S. Federal Reserve, the brokerage said. A Reuters poll showed that activity in China’s manufacturing sector likely grew at a slightly slower pace in October as the government began a major crackdown on air pollution. On Monday, most sectors lost ground, led by consumer and resources shares.
Kweichow Moutai, the world’s most valuable liquor maker, dropped 2.9 percent from Friday’s record high, leading the retreat in consumer firms, as investors paused after recent strong gains. In Hong Kong, the Hang Seng index added 0.1 percent, to 28,452.22 points. The Hong Kong China Enterprises Index lost 0.1 percent, to 11,631.74. ($1 = 6.6436 Chinese yuan)