Analysts said the performance of Chinese stocks will hinge on domestic cash conditions and how the eurozone debt crisis develops in the short term. They expect the benchmark Shanghai index to consolidate around 2500 this month.
Uncertainties in both domestic and global markets are keeping China's investors on the defensive," said Li Lei, an analyst at Goldstate Securities. "The stock market won't get better until the government launches some pro-market measures," he said, referring to some easing in monetary policy.
Market volumes were light as many investors sat on the sidelines. The turnover on the Shanghai index totaled CNY51.85 billion, lower than last week's average daily volume of CNY56 billion.
While China's stock exchanges were closed Monday for the Mid-Autumn festival, Asian stock markets dropped sharply, with some shares hitting multiyear lows, on renewed fears over Europe's sovereign debt crisis.
Property stocks were Tuesday hit by news that Quzhou, a second-tier city in the eastern Zhejiang province, became the latest Chinese city to impose a limit on the number of properties an individual can own.
The Chinese government imposed restrictions on home buying in first-tier cities last year and extended the curbs to some second-tier cities earlier this year.
"The chances for a significant decline in China's property investment growth in the coming months are quite big," said Citic Securities in a note.
Zhejiang-based property developer Xinhu Zhongbao fell 2.4% to CNY4.41, Zhejiang Guangsha dropped 2.2% to CNY4.08 and China Vanke ended down 0.1% at CNY8.07.
Cement stocks bucked the general market trend on bargain hunting after recent sharp falls. Jidong Cement rose 2.3% to CNY15.82 after losing 16% last week and Anhui Conch Cement gained 1.3% to CNY18.28 after declining 18% over the same period.
The current signs of easing inflation and slowing economic growth in China are not enough to trigger an immediate monetary policy easing, analysts say.
"Since the latest set of Chinese economic data is largely in line with expectations, investors are paying more attention to the overseas markets," said Li Bin, an analyst at Capital Care Securities, adding the sharp declines in regional markets on Monday hurt sentiment. source online.wsj.com For the latest updates PRESS CTR + D or visit Stock Market news Today
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