You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App
Join our mailing list to receive top business news every weekday morning.

China stocks see biggest drop in 6 weeks as tech firms sink

Stocks drop after state-backed fund said it would reduce its stakes in some tech companies.
Image: Bryan van der Beek, Bloomberg

China’s benchmark stock gauge suffered its first drop of more than 1% in six weeks after a state-backed fund said it would reduce its stakes in some tech companies.

The Shanghai Composite Index closed down 1.4% on Monday, its biggest decline since November 11. The CSI 300 Index slumped 1.3%, its fourth consecutive retreat, with technology-related shares leading the losses.

Three stocks that have surged at least 73% this year tumbled after the state-backed China Integrated Circuit Industry Investment Fund said it would reduce its holdings in them. Goke Microelectronics Co. fell by the 10% daily limit, while Shenzhen Goodix Technology Co. dropped 5.1% and GigaDevice Semiconductor Beijing Inc. slumped 6.7%.

The stake cuts were seen sending a bearish signal to investors. “The drop today was mainly due to mutual funds using the state fund cutting stakes as a catalyst to lock in gains before year’s end,” said Wu Yuefeng, fund manager at Funding Capital Management (Beijing) Co. “Investors are pricing in for the worst in the immediate term.”

Baijiu-related shares also retreated fell, with Jiugui Liquor Co. tumbling by the daily limit after denying Chinese media reports that it added a sweetener to its products. Shede Spirits Co. and Anhui Yingjia Distillery Co. dropped at least 3%.

© 2019 Bloomberg L.P.

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.

COMMENTS   2

You must be signed in to comment.

SIGN IN SIGN UP

Maybe property is the way to go (excludes SA).

ITU looks cheap.

Communism doesn’t work, not even in an autocratic state like China.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR

Podcasts

NEWSLETTERS WEB APP SHOP PORTFOLIO TOOL TRENDING CPD HUB

Follow us:

Search Articles:Advanced Search
Click a Company: