China stocks fall as material, energy shares drag on profit-taking

China stocks fall as material, energy shares drag on profit-taking

BEIJING/SHANGHAI: China stocks dropped on Tuesday, dragged down by material and energy shares, as investors booked profit following the recent rally fuelled by continued policy support and upbeat data underscoring economic recovery.

At the midday break, the Shanghai Composite index was down 0.33 per cent at 3,386.14 points, while the blue-chip CSI300 index was down 0.26 per cent.

Several sub-indexes recorded losses by the mid-day break, with the material sub-index dropping 1.9 per cent, the energy sub-index falling 1.54 per cent and the consumer staples sector slipping 1.25 per cent.

The smaller Shenzhen index was down 0.43 per cent, the start-up board ChiNext Composite index was weaker by 0.77 per cent, while Shanghai’s tech-focused STAR50 index was up 0.12 per cent.

The recent rally offered an opportunity for investors to take profits before the year-end, but continued policy support expressed in the latest economic working conference, and signs of economic recovery will back the performance in a long run, said Zhang Qi, an analyst with Haitong Securities.

China’s factory activity likely maintained a solid pace of expansion in December, a Reuters poll showed on Tuesday, as the world’s second-largest economy steadily recovers from the coronavirus crisis.

China is scheduled to release its official manufacturing Purchasing Manager’s Index (PMI) on Thursday.

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