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Jan. 19, 2015, 3:17 a.m. EST

China stocks plunge amid regulator crackdown on margins

Fresh fall in Chinese home prices also weighs on markets

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By Laura He, MarketWatch


Reuters Enlarge Image
Chinese stocks dive Monday morning, even as most other Asian markets trade higher.

HONG KONG (MarketWatch) — Chinese stocks dived the most in over six years Monday, with a wide sell-off sweeping across the financial sector as investors turned jittery over the latest move by securities regulators to clean up the margin-trading business.

The benchmark Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP +0.05%   plunged 7.7% to close at 3,116.35, posting its biggest daily percentage decline since June 2008 . Prior to Monday’s heavy loss, the index was up 4.4% for the month to date, extending gains after finishing 2014 with a sharp 53% advance.

The plunge in mainland China helped to push Hong Kong’s benchmark Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.41%  down 1.5%, with the Hang Seng China Enterprises — which tracks Hong Kong-listed mainland Chinese companies — off 5%.

The China Securities Regulatory Commission, the nation’s top market watchdog, announced Friday that a dozen brokerage firms had been punished for violations of margin-trading rules after a two-week overhaul. Infractions included allowing customers to delay margin repayments by longer than currently allowed.

The three most severely punished brokers were Citic Securities Co., Haitong Securities Co. and a unit of Guotai Junan International Holdings Ltd., which were all banned from opening new customer accounts for three months.

The A-shares of both Citic Securities /zigman2/quotes/210326178/delayed CN:600030 -0.83%   /zigman2/quotes/208139708/delayed HK:6030 -0.80% , which is owned by financial giant Citic Group, and Haitong Securities /zigman2/quotes/203443667/delayed CN:600837 0.00%   /zigman2/quotes/207313420/delayed HK:6837 -0.58%  were suspended from trading after falling limit-down by 10%.

Other financial stocks, including banks and insurances, were also under heavy selling pressure in Shanghai.

China Citic Bank Corporation Ltd /zigman2/quotes/206411273/delayed CN:601998 -0.71%  , another listed subsidiary of Citic Group, Bank of China Ltd. /zigman2/quotes/209359942/delayed CN:601988 -0.56%   /zigman2/quotes/204682472/delayed HK:3988 -0.93% /zigman2/quotes/201568493/delayed BACHY +0.68% , Industrial & Commercial Bank of China Ltd. /zigman2/quotes/202525815/delayed CN:601398 -0.55%   /zigman2/quotes/201401473/delayed HK:1398 -0.90%   /zigman2/quotes/204265987/delayed IDCBF +1.60%  and Agricultural Bank of China Ltd. /zigman2/quotes/204629388/delayed CN:601288 -0.58%   /zigman2/quotes/200705246/delayed HK:1288 +0.32%   /zigman2/quotes/209398792/delayed ACGBF +6.65%  all hit the 10% daily price-drop limit.

Among major insurers, China Life Insurance Co. Ltd. /zigman2/quotes/204766889/delayed CN:601628 -1.02%   /zigman2/quotes/202359856/delayed HK:2628 -1.03%   /zigman2/quotes/206573290/composite LFC -0.88%  and Ping An Insurance Group Co. /zigman2/quotes/202773380/delayed CN:601318 -1.02%   /zigman2/quotes/210315058/delayed HK:2318 -0.76%   /zigman2/quotes/202212125/delayed PNGAY -0.04%  likewise saw their A-shares suspended after their price falls exceeded the daily limit.

The Chinese financial sector in Hong Kong market didn’t escape the sharp sell-off either. Major underperformers included Haitong Securities (down 16.5%), Citic Securities (down 16.5%), Shenyin Wanguo HK Ltd. /zigman2/quotes/208006958/delayed HK:218 -0.83%   (down 15%), and China Galaxy Securities Co. /zigman2/quotes/206618523/delayed HK:6881 -0.68% (down 13.2%).

Also affecting sentiment was a fresh fall in home prices across China’s major cities.

Among the Shanghai-listed shares of top mainland Chinese developers, both Gemdale Corp. /zigman2/quotes/208026094/delayed CN:600383 -1.92%   and Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 -1.52%   gave up 10%.

Among the real-estate names listed in Hong Kong, China Vanke Co. /zigman2/quotes/203851375/delayed HK:2202 -3.64%   retreated 6.3%, China Overseas Land & Investment Ltd. /zigman2/quotes/205731176/delayed HK:688 -2.09%   /zigman2/quotes/210412581/delayed CAOVF +1.14%   lost 3.5%, and China Resources Land Ltd. /zigman2/quotes/202417326/delayed HK:1109 -2.08%   /zigman2/quotes/201656413/delayed CRBJF +5.00%  dropped 3.1%.

However, other Asian markets were boosted by a rebound in the U.S. stocks at the end of last week. Japan’s Nikkei Average /zigman2/quotes/210597971/delayed JP:NIK -1.40%  ended up 0.9%, and the broader Topix tacked on 0.6%.

Sydney’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.16%  edged up 0.2%, while Seoul’s Kospi Composite Index /zigman2/quotes/210598069/delayed KR:180721 -1.48%   settled 0.8% higher.

/zigman2/quotes/210598127/delayed
CN : China: Shanghai
2,984.97
+1.35 +0.05%
Volume: 31.17B
Feb. 18, 2020 3:01p
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/zigman2/quotes/210598030/delayed
HK : Hong Kong Exchange
27,564.82
-394.78 -1.41%
Volume: 1.17M
Feb. 18, 2020 3:08p
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/zigman2/quotes/210326178/delayed
CN : China: Shanghai
¥ 23.98
-0.20 -0.83%
Volume: 191.60M
Feb. 18, 2020 3:00p
P/E Ratio
23.07
Dividend Yield
1.46%
Market Cap
¥312.57 billion
Rev. per Employee
¥2.96M
loading...
/zigman2/quotes/208139708/delayed
HK : Hong Kong
HK$ 17.32
-0.14 -0.80%
Volume: 20.29M
Feb. 18, 2020 3:07p
P/E Ratio
17.76
Dividend Yield
2.30%
Market Cap
HK$211.56 billion
Rev. per Employee
HK$3.51M
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/zigman2/quotes/203443667/delayed
CN : China: Shanghai
¥ 14.80
0.00 0.00%
Volume: 89.50M
Feb. 18, 2020 3:00p
P/E Ratio
18.89
Dividend Yield
1.01%
Market Cap
¥170.23 billion
Rev. per Employee
¥2.67M
loading...
/zigman2/quotes/207313420/delayed
HK : Hong Kong
HK$ 8.53
-0.05 -0.58%
Volume: 14.12M
Feb. 18, 2020 3:08p
P/E Ratio
9.51
Dividend Yield
2.00%
Market Cap
HK$98.68 billion
Rev. per Employee
HK$3.20M
loading...
/zigman2/quotes/206411273/delayed
CN : China: Shanghai
¥ 5.62
-0.04 -0.71%
Volume: 17.80M
Feb. 18, 2020 3:00p
P/E Ratio
7.22
Dividend Yield
4.09%
Market Cap
¥276.97 billion
Rev. per Employee
¥5.22M
loading...
/zigman2/quotes/209359942/delayed
CN : China: Shanghai
¥ 3.58
-0.02 -0.56%
Volume: 80.30M
Feb. 18, 2020 3:00p
P/E Ratio
5.65
Dividend Yield
5.14%
Market Cap
¥1059.73 billion
Rev. per Employee
¥2.61M
loading...
/zigman2/quotes/204682472/delayed
HK : Hong Kong
HK$ 3.20
-0.03 -0.93%
Volume: 196.19M
Feb. 18, 2020 3:08p
P/E Ratio
4.50
Dividend Yield
6.59%
Market Cap
HK$950.80 billion
Rev. per Employee
HK$3.13M
loading...
/zigman2/quotes/201568493/delayed
US : U.S.: OTC
$ 10.30
+0.07 +0.68%
Volume: 28,908
Feb. 14, 2020 3:48p
P/E Ratio
4.62
Dividend Yield
5.40%
Market Cap
$34.67 billion
Rev. per Employee
$399,878
loading...
/zigman2/quotes/202525815/delayed
CN : China: Shanghai
¥ 5.46
-0.03 -0.55%
Volume: 184.54M
Feb. 18, 2020 3:00p
P/E Ratio
6.28
Dividend Yield
4.59%
Market Cap
¥1956.67 billion
Rev. per Employee
¥2.53M
loading...
/zigman2/quotes/201401473/delayed
HK : Hong Kong
HK$ 5.52
-0.05 -0.90%
Volume: 166.92M
Feb. 18, 2020 3:08p
P/E Ratio
5.57
Dividend Yield
5.16%
Market Cap
HK$1985.18 billion
Rev. per Employee
HK$3.03M
loading...
/zigman2/quotes/204265987/delayed
US : U.S.: OTC
$ 0.73
+0.01 +1.60%
Volume: 0.00
Feb. 12, 2020 3:47p
P/E Ratio
5.77
Dividend Yield
N/A
Market Cap
$254.01 billion
Rev. per Employee
$387,287
loading...
/zigman2/quotes/204629388/delayed
CN : China: Shanghai
¥ 3.45
-0.02 -0.58%
Volume: 159.35M
Feb. 18, 2020 3:00p
P/E Ratio
5.70
Dividend Yield
5.04%
Market Cap
¥1214.44 billion
Rev. per Employee
¥1.80M
loading...
/zigman2/quotes/200705246/delayed
HK : Hong Kong
HK$ 3.18
+0.01 +0.32%
Volume: 126.41M
Feb. 18, 2020 3:08p
P/E Ratio
4.60
Dividend Yield
6.22%
Market Cap
HK$1109.45 billion
Rev. per Employee
HK$2.16M
loading...
/zigman2/quotes/209398792/delayed
US : U.S.: OTC
$ 0.40
+0.03 +6.65%
Volume: 0.00
Feb. 12, 2020 10:45a
P/E Ratio
4.59
Dividend Yield
N/A
Market Cap
$143.21 billion
Rev. per Employee
$276,273
loading...
/zigman2/quotes/204766889/delayed
CN : China: Shanghai
¥ 31.12
-0.32 -1.02%
Volume: 16.72M
Feb. 18, 2020 3:00p
P/E Ratio
17.87
Dividend Yield
0.51%
Market Cap
¥888.64 billion
Rev. per Employee
¥6.30M
loading...
/zigman2/quotes/202359856/delayed
HK : Hong Kong
HK$ 19.28
-0.20 -1.03%
Volume: 31.53M
Feb. 18, 2020 3:08p
P/E Ratio
9.66
Dividend Yield
0.94%
Market Cap
HK$550.60 billion
Rev. per Employee
HK$7.60M
loading...
/zigman2/quotes/206573290/composite
US : U.S.: NYSE
$ 12.34
-0.11 -0.88%
Volume: 212,168
Feb. 14, 2020 6:30p
P/E Ratio
9.70
Dividend Yield
0.68%
Market Cap
$18.36 billion
Rev. per Employee
$970,796
loading...
/zigman2/quotes/202773380/delayed
CN : China: Shanghai
¥ 81.55
-0.84 -1.02%
Volume: 51.32M
Feb. 18, 2020 3:00p
P/E Ratio
10.13
Dividend Yield
2.27%
Market Cap
¥1501.37 billion
Rev. per Employee
¥2.83M
loading...
/zigman2/quotes/210315058/delayed
HK : Hong Kong
HK$ 91.05
-0.70 -0.76%
Volume: 19.38M
Feb. 18, 2020 3:08p
P/E Ratio
9.64
Dividend Yield
2.33%
Market Cap
HK$1671.93 billion
Rev. per Employee
HK$3.35M
loading...
/zigman2/quotes/202212125/delayed
US : U.S.: OTC
$ 23.37
-0.01 -0.04%
Volume: 123,687
Feb. 14, 2020 3:57p
P/E Ratio
9.90
Dividend Yield
1.92%
Market Cap
$87.03 billion
Rev. per Employee
$427,016
loading...
/zigman2/quotes/208006958/delayed
HK : Hong Kong
HK$ 1.19
-0.01 -0.83%
Volume: 95,000
Feb. 18, 2020 3:08p
P/E Ratio
10.55
Dividend Yield
1.68%
Market Cap
HK$1.87 billion
Rev. per Employee
HK$1.58M
loading...
/zigman2/quotes/206618523/delayed
HK : Hong Kong
HK$ 4.35
-0.03 -0.68%
Volume: 6.92M
Feb. 18, 2020 3:00p
P/E Ratio
7.92
Dividend Yield
2.35%
Market Cap
HK$44.40 billion
Rev. per Employee
HK$1.14M
loading...
/zigman2/quotes/208026094/delayed
CN : China: Shanghai
¥ 13.79
-0.27 -1.92%
Volume: 29.67M
Feb. 18, 2020 3:00p
P/E Ratio
7.52
Dividend Yield
4.35%
Market Cap
¥63.48 billion
Rev. per Employee
¥7.89M
loading...
/zigman2/quotes/201864015/delayed
CN : China: Shanghai
¥ 15.50
-0.24 -1.52%
Volume: 75.87M
Feb. 18, 2020 3:00p
P/E Ratio
8.33
Dividend Yield
3.23%
Market Cap
¥187.82 billion
Rev. per Employee
¥3.42M
loading...
/zigman2/quotes/203851375/delayed
HK : Hong Kong
HK$ 30.45
-1.15 -3.64%
Volume: 5.09M
Feb. 18, 2020 3:08p
P/E Ratio
7.84
Dividend Yield
3.91%
Market Cap
HK$357.15 billion
Rev. per Employee
HK$4.54M
loading...
/zigman2/quotes/205731176/delayed
HK : Hong Kong
HK$ 28.05
-0.60 -2.09%
Volume: 8.11M
Feb. 18, 2020 3:04p
P/E Ratio
6.59
Dividend Yield
3.39%
Market Cap
HK$313.90 billion
Rev. per Employee
HK$30.79M
loading...
/zigman2/quotes/210412581/delayed
US : U.S.: OTC
$ 3.55
+0.04 +1.14%
Volume: 0.00
Feb. 13, 2020 1:40p
P/E Ratio
6.54
Dividend Yield
N/A
Market Cap
$40.37 billion
Rev. per Employee
$3.93M
loading...
/zigman2/quotes/202417326/delayed
HK : Hong Kong
HK$ 35.35
-0.75 -2.08%
Volume: 6.12M
Feb. 18, 2020 3:08p
P/E Ratio
7.59
Dividend Yield
3.55%
Market Cap
HK$257.43 billion
Rev. per Employee
HK$3.68M
loading...
/zigman2/quotes/201656413/delayed
US : U.S.: OTC
$ 4.41
+0.21 +5.00%
Volume: 0.00
Feb. 7, 2020 3:42p
P/E Ratio
7.42
Dividend Yield
N/A
Market Cap
$31.45 billion
Rev. per Employee
$470,019
loading...
/zigman2/quotes/210597971/delayed
JP : Nikkei
23,193.80
-329.44 -1.40%
Volume: 0.00
Feb. 18, 2020 3:15p
loading...
/zigman2/quotes/210598100/delayed
AU : S&P ASX
7,113.70
-11.40 -0.16%
Volume: 627,529
Feb. 18, 2020 5:22p
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/zigman2/quotes/210598069/delayed
KR : Korea Exchange
2,208.88
-33.29 -1.48%
Volume: 464,879
Feb. 18, 2020 3:30p
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Laura He is a MarketWatch reporter based in Hong Kong. Follow Laura on Twitter at: @lauraliuhe.

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