China markets down as Beijing muses production limit on steel and cement
China markets dropped today after China said it may curb production in the steel and cement industries.
China's Shanghai Composite Index dropped 0.7 percent although winning shares outnumbered losers by 576 to 296. Turnover for Shanghai A shares rose to 145 billion yuan ($21 billion) from Wednesday's 143 billion yuan.
Hong Kong's Hang Seng Index declined 1 percent, led by blue-chips. The China Enterprises Index, which represents top Hong Kong listed mainland Chinese stocks, was down 0.7 percent at 11,570.67.
China's cabinet said yesterday evening it will try to curb overcapacity and excessive investment in the steel and cement industries, and "enhance management" of certain industries including flat glass, chemicals, wind power and polysilicon production.
According to the statement, measures may include strict controls on market access, reinforced environmental supervision and tougher controls over land use. Banks will also be required to lend money to targeted sectors.
Cement companies listed in Hong Kong fell on the news, while those listed in Shanghai rose. China Shanshui Cement Group Limited (HK:0691) fell 6.2 percent. Anhui Conch Cement (HK:0914) fell 4.3 percent. Asia Cement (HK:0743) dropped 3.8 percent.
Taiyuan Lionhead Cemeny (SH:600539) rose 2 percent.Huaxin Cement Co. Ltd (SH:600801) rose 0.3 percent. Shaanxi QinLing Cement (SH:600217) was up 5.1 percent.
The wold's sixth largest fashion retailer, Esprit (HK:0330) dropped 15 percent after posting a 40 percent fall in second-half profit
In other disappointing blue-chip results, state-owned top offshore oil producer CNOOC (HK:0883) fell 3 percent after reporting a 55 percent drop in first-half earnings. Sinopec Corp (SH:600028, HK:0386, NYSE:SNP) slid 2.9 percent in Shanghai and 0.1 percent in Hong Kong.
PetroChina (SH:601857, HK:0857), which reports it first half earnings tomorrow, sunk 2.71 percent in Shanghai and 0.3 percent in Hong Kong.
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