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1st LD-Writethru: China stocks in negative territory despite government support

Xinhua, July 7, 2015 Adjust font size:

Chinese shares fell into negative territory on Tuesday after Monday's uptick as government support measures failed to reverse the losing streak.

The benchmark Shanghai Composite Index edged down 1.29 percent to finish at 3,727.13 points.

The Shenzhen Component Index slumped 5.8 percent to close at 11,375.6 points.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, plunged 5.69 percent to end at 2,352.01 points.

Combined turnover of the two bourses shrank to 1.08 trillion yuan (176.47 billion U.S. dollars) from 1.55 trillion yuan the previous trading day.

Losers outnumbered winners by 819 to 55 in Shanghai, and by 1,109 to 25 in Shenzhen. More than 1,700 shares on the two bourses dived by the daily limit of 10 percent.

A total of 750 of the roughly 2,800 companies listed in Shanghai and Shenzhen had filed for a trading halt by the close on Tuesday to avoid further losses.

Shares fell across the board in most industries, with utilities, steel and Internet finance leading the losses. Nanjing Iron & Steel plunged by the daily limit of 10 percent to end at 3.93 yuan per share.

Gains were focused on blue chips, the explicit target of the stabilization fund, particularly the big banks, with China Citic Bank Corporation surging by the daily limit of 10 percent to end at 9.1 yuan.

To arrest the further slump of the Shanghai Composite Index, which has tumbled by nearly 30 percent since a peak on June 12, the government has rolled out a raft of stimulus measures, including moves to pour funds and restrictions on futures trading on a major small-cap index.

Datong Securities said reversing the downward trend will take time as investors regain confidence.

According to a research report from Shenwan Hongyuan Securities, the Shanghai Composite Index will continue to rise and fall in the coming three months between 3,600 points and 4,500 points. Endi