China stocks fall 1.4 per cent after state fund plans to cut stake in semiconductor firms
- The Shanghai Composite ends below 3,000-point level for the first time in five sessions
- State-backed “Big Fund” that supports home-grown chip makers to cut stakes in three firms
China markets retreated on Monday as investors pocketed gains after a spectacular year, with technology stocks leading the decline after a state-backed investment fund said it would cut stakes in some semiconductor firms.
The Shanghai Composite Index fell 1.4 per cent to 2,962.75, dropping below the 3,000-point level for the first time since December 17. About 1,350 constituents of the benchmark fell, nearly eight times the number of stocks that rose.
The benchmark has risen by 19 per cent so far this year, after capping its third straight week of gains last week.
“Some investors would like to lock up their gains early ahead of the year-end,” said Ivan Li, asset manager with Shanghai-based Loyal Wealth Management.
“But the rally might not have run out of steam. The overall market sentiment remains strong now that the US and China have reached the phase one [trade] deal.”
The Shenzhen Component Index declined 1.7 per cent, and the ChiNext Index of start-ups listed in Shenzhen shed 2 per cent.
In Hong Kong, stocks inched up amid low trading volume ahead of the Christmas holiday. Turnover on the main board stood at HK$66 billion, much lower than the daily average of HK$80 billion in November.