SHANGHAI: China blue chips fell on Tuesday after data showed the services sector in the world’s second-biggest economy slumped into contraction and as analysts noted that Beijing’s scrutiny over online gaming would affect the long-term growth of the industry.
At the close, the blue-chip CSI300 index ended 0.16% lower, with the consumer staples sector down 1.58% and the healthcare sub-index down 1.98%.
China staged an impressive recovery from a coronavirus slump, but momentum has weakened recently due to domestic COVID-19 outbreaks, high raw material prices, slowing exports, tighter measures to tame hot property prices and a campaign to reduce carbon emissions.
“It seems the government is still aiming the end of this year to launch fiscal stimulus. This means growth will likely slow further in the coming months,” Zhiwei Zhang, chief economist at Pinpoint Asset Management said.
But, prospects of further stimulus support lifted the Shanghai Composite index by 0.45% to 3,543.94 at the close.
High-tech firms sank, with CSI information technology sub-index slumping 1.86% after China introduced new rules forbidding under-18s from playing video games for more than three hours a week.
The smaller Shenzhen index ended down 0.46% and the start-up board ChiNext Composite index was weaker by 1.76%.
Regulatory probes also weighed on A-shares of Ping An Insurance Group Co of China Ltd, which fell 1.6%. Reuters reported that China’s banking and insurance regulator was probing the company’s property market investments following a big profit hit from a soured bet.
So far this year, the Shanghai stock index climbed 2% and the CSI300 dropped 7.8%, while China’s H-share index listed in Hong Kong slumped 15.1%. Shanghai stocks have risen 4.31% this month. – Reuters
