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China stocks fell on Friday morning in listless trade, dragged lower by brokerage and insurance shares, as investors shift their focus towards tougher financial regulation and away from a bond scandal whose risks are fading.
Hong Kong equities dipped to five-month low on the last trading day before the Christmas break, and are poised to fall for the second straight week after rosier US growth data deepened fears of money flowing out of emerging markets.
The CSI300 index fell 0.6 per cent to 3,316.59 points at the end of the morning session, while the Shanghai Composite Index lost 0.6 per cent to 3,120.45 points.
The blue-chips have lost nearly 0.9 per cent so far thisweek, and are posed to fall for a third straight week.
Brokerage and insurance shares fell, amid signs of tougher regulation in the sectors, potentially hurting their revenue streams.
Local media reported that regulators would tighten supervision over online insurance products, as well as brokerages’ alternative investment business, the latest efforts to contain financial risks.
Meanwhile, market sentiment was hurt by a tumble in coal prices, which knocked down the share prices of coal producers.
Shares of coal majors China Shenhua Energy Co Ltd and Shamanic Coal Industry Co Ltd were both down around 2 per cent, as futures contract of coke retreated nearly 4 per cent.
Bucking the broader trend, infrastructure stocks gained after receiving a boost from China State Construction Engineering Corp Ltd, which jumped on news that it would invest at least 160 billion yuan ($23.02 billion) on infrastructure projects.
Hong Kong
In Hong Kong, the Hang Sen index dropped 0.5 per cent to 21,521.75 points, while the Hong Kong China Enterprises Index lost 0.8 per cent to 9,124.82 points.
For the week, the benchmark was down 2.3 per cent at midday.
Most traders retain positive bets on the US dollar, particularly after upbeat economic data, including an upward revision to third-quarter economic growth on Thursday.
Bright US growth prospects would potentially lure capital out of emerging markets.
The energy sector was the biggest decliner in Hong Kong, down 1 per cent at the lunch break.
The Hong Kong market will be closed on Monday and Tuesday for Christmas. ($1 = 6.9498 Chinese yuan termini)
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