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Property curb concerns hit stocks

Property curb concerns hit stocks

SHANGHAI stocks continued to retreat for the second consecutive day over concerns that continued property curbs will weigh on market rebound and hurt developers' earnings.

The Shanghai Composite Index fell 1.25 percent - the most in a week - to 2,297.67 points today.

Turnover was 91.8 billion yuan (US$14.6 billion).

"Media reports on banks preparing to tighten mortgage lending practices are likely to weigh on sentiment and put downward pressure on equities," Dariusz Kowalczyk, senior economist at Credit Agricole in Hong Kong said in an emailed research note today.

Lenders tumbled 2.6 percent on average after the China Securities Journal said on its website today that many banks started to control the scale of loans for property development this month in response to the new round of property curbs by the government.

The China Banking Regulatory Commission is drafting guidelines on property loans, including development loans and mortgages, the official newspaper reported, citing unnamed sources close to the regulator.

Agricultural Bank of China, the nation's third-biggest lender, shed 1.4 percent to 2.86 yuan. Bank of Communications, the fifth-biggest lender, retreated 2 percent to 4.8 yuan. China Minsheng Banking Co slumped 4.5 percent to 10.5 yuan.

Property developer prices were mixed after Guangdong Province released detailed rules on housing curbs.

China Vanke Co, the nation's biggest developer, dropped 0.18 percent to 11.12 yuan. But China Enterprise Co, a smaller developer based in Shanghai, surged by the daily limit of 10 percent to 5.07 yuan.

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