China Stocks Fall Amid Concern Government to Pare Support Steps

China’s stocks fell for the first time in three days amid concern over the sustainability of the market’s rebound as the government pares support measures.

The Shanghai Composite Index dropped 0.3 percent to 3,635.55 at the close, erasing a gain of as much as 0.6 percent in the last hour of trading. A gauge of technology companies, this year’s best performer, slumped the most among industry groups, while the small-company ChiNext index tumbled 2.2 percent. Jiangxi Copper Co. led a rally for metal producers. Industrial metals surged as the country’s largest copper and nickel suppliers were said to be planning to meet this week to find ways to cope with a supply glut.

The Shanghai Composite has risen 24 percent from its August low. The market rebound has prompted authorities this month to relax some emergency measures imposed during a mid-year rout including resuming initial public offerings and scrapping a rule requiring brokerages to hold net-long positions. The gauge’s 10-day volatility has fallen to an eight-month low, while the number of new investors jumped to a four-month high last week.

Source : Bloomberg

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China Shares Rise to 11-Week High as Government Resumes IPOs

China stocks rose to a 11-week high as the government’s plan to resume initial public offerings by the end of the year boosted brokerages and banks. Bonds slumped.

The Shanghai Composite Index climbed 1.6 percent to 3,646.88 at the close, the highest level since Aug. 20. China Citic Bank Corp. and Western Securities Co. surged more than 8 percent. Under the plan announced late Friday by the securities regulator, investors will no longer be required to deposit funds when applying for new share subscriptions. The yield on sovereign notes due October 2025 climbed 13.5 basis points to 3.27 percent, the biggest jump in two years.

China’s plan to lift a five-month freeze on new share sales signals growing confidence by authorities that the stock market can stand on its own after the Shanghai Composite rallied back into a bull market last week. The move will also help Chinese companies tap into an important source of financing as they seek to cut debt levels from highs.

Source : Bloomberg

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