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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 +1.14%   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 +0.28%  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 +2.32%   /zigman2/quotes/208139708/delayed HK:6030 +3.54% , which is owned by financial giant Citic Group, and Haitong Securities /zigman2/quotes/203443667/delayed CN:600837 +2.19%   /zigman2/quotes/207313420/delayed HK:6837 +1.49%  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 +3.80%  , another listed subsidiary of Citic Group, Bank of China Ltd. /zigman2/quotes/209359942/delayed CN:601988 +2.46%   /zigman2/quotes/204682472/delayed HK:3988 +2.21% /zigman2/quotes/201568493/delayed BACHY +3.10% , Industrial & Commercial Bank of China Ltd. /zigman2/quotes/202525815/delayed CN:601398 +5.89%   /zigman2/quotes/201401473/delayed HK:1398 +4.28%   /zigman2/quotes/204265987/delayed IDCBF +3.21%  and Agricultural Bank of China Ltd. /zigman2/quotes/204629388/delayed CN:601288 +2.79%   /zigman2/quotes/200705246/delayed HK:1288 +3.46%   /zigman2/quotes/209398792/delayed ACGBF +7.11%  all hit the 10% daily price-drop limit.

Among major insurers, China Life Insurance Co. Ltd. /zigman2/quotes/204766889/delayed CN:601628 +1.95%   /zigman2/quotes/202359856/delayed HK:2628 +3.01%   /zigman2/quotes/206573290/composite LFC +5.55%  and Ping An Insurance Group Co. /zigman2/quotes/202773380/delayed CN:601318 +1.07%   /zigman2/quotes/210315058/delayed HK:2318 +0.88%   /zigman2/quotes/202212125/delayed PNGAY +2.50%  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 +1.09%   (down 15%), and China Galaxy Securities Co. /zigman2/quotes/206618523/delayed HK:6881 +1.19% (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 +1.42%   and Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 +3.02%   gave up 10%.

Among the real-estate names listed in Hong Kong, China Vanke Co. /zigman2/quotes/203851375/delayed HK:2202 +2.77%   retreated 6.3%, China Overseas Land & Investment Ltd. /zigman2/quotes/205731176/delayed HK:688 +3.30%   /zigman2/quotes/210412581/delayed CAOVF -4.41%   lost 3.5%, and China Resources Land Ltd. /zigman2/quotes/202417326/delayed HK:1109 +2.40%   /zigman2/quotes/201656413/delayed CRBJF +13.08%  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 +0.40%  ended up 0.9%, and the broader Topix tacked on 0.6%.

Sydney’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.53%  edged up 0.2%, while Seoul’s Kospi Composite Index /zigman2/quotes/210598069/delayed KR:180721 +0.29%   settled 0.8% higher.

/zigman2/quotes/210598127/delayed
CN : China: Shanghai
3,408.31
+38.57 +1.14%
Volume: 28.06B
Nov. 27, 2020 3:01p
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/zigman2/quotes/210598030/delayed
HK : Hong Kong Exchange
26,894.68
+75.23 +0.28%
Volume: 2.74M
Nov. 27, 2020 4:09p
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/zigman2/quotes/210326178/delayed
CN : China: Shanghai
¥ 29.98
+0.68 +2.32%
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Nov. 27, 2020 3:00p
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26.65
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1.67%
Market Cap
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¥4.13M
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HK : Hong Kong
HK$ 17.54
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CN : China: Shanghai
¥ 13.56
+0.29 +2.19%
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0.00%
Market Cap
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HK : Hong Kong
HK$ 6.80
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/zigman2/quotes/206411273/delayed
CN : China: Shanghai
¥ 5.46
+0.20 +3.80%
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4.38%
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CN : China: Shanghai
¥ 3.33
+0.08 +2.46%
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¥899.21 billion
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HK : Hong Kong
HK$ 2.78
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Market Cap
HK$1058.81 billion
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N/A
loading...
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US : U.S.: OTC
$ 8.97
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6.22%
Market Cap
$136.61 billion
Rev. per Employee
$430,763
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/zigman2/quotes/202525815/delayed
CN : China: Shanghai
¥ 5.39
+0.30 +5.89%
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Market Cap
¥1812.19 billion
Rev. per Employee
¥2.88M
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/zigman2/quotes/201401473/delayed
HK : Hong Kong
HK$ 4.87
+0.20 +4.28%
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5.41
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5.90%
Market Cap
HK$2133.81 billion
Rev. per Employee
HK$3.26M
loading...
/zigman2/quotes/204265987/delayed
US : U.S.: OTC
$ 0.61
+0.02 +3.21%
Volume: 10,200
Nov. 27, 2020 9:30a
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4.81
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N/A
Market Cap
$275.30 billion
Rev. per Employee
$416,749
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/zigman2/quotes/204629388/delayed
CN : China: Shanghai
¥ 3.32
+0.09 +2.79%
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P/E Ratio
5.50
Dividend Yield
5.48%
Market Cap
¥1137.95 billion
Rev. per Employee
¥2.16M
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/zigman2/quotes/200705246/delayed
HK : Hong Kong
HK$ 2.99
+0.10 +3.46%
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Nov. 27, 2020 4:09p
P/E Ratio
4.79
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6.66%
Market Cap
HK$1339.91 billion
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HK$2.48M
loading...
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US : U.S.: OTC
$ 0.40
+0.03 +7.11%
Volume: 2,084
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P/E Ratio
4.60
Dividend Yield
N/A
Market Cap
$172.87 billion
Rev. per Employee
$311,969
loading...
/zigman2/quotes/204766889/delayed
CN : China: Shanghai
¥ 42.80
+0.82 +1.95%
Volume: 26.72M
Nov. 27, 2020 3:00p
P/E Ratio
25.56
Dividend Yield
1.71%
Market Cap
¥1008.16 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/202359856/delayed
HK : Hong Kong
HK$ 18.50
+0.54 +3.01%
Volume: 73.72M
Nov. 27, 2020 4:09p
P/E Ratio
9.22
Dividend Yield
4.32%
Market Cap
HK$1187.09 billion
Rev. per Employee
HK$7.60M
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/zigman2/quotes/206573290/composite
US : U.S.: NYSE
$ 11.99
+0.63 +5.55%
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Nov. 27, 2020 5:00p
P/E Ratio
10.01
Dividend Yield
3.70%
Market Cap
$153.16 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/202773380/delayed
CN : China: Shanghai
¥ 90.10
+0.95 +1.07%
Volume: 74.80M
Nov. 27, 2020 3:00p
P/E Ratio
12.64
Dividend Yield
2.33%
Market Cap
¥1549.72 billion
Rev. per Employee
¥3.17M
loading...
/zigman2/quotes/210315058/delayed
HK : Hong Kong
HK$ 91.70
+0.80 +0.88%
Volume: 36.80M
Nov. 27, 2020 4:09p
P/E Ratio
12.27
Dividend Yield
2.53%
Market Cap
HK$1824.76 billion
Rev. per Employee
HK$3.35M
loading...
/zigman2/quotes/202212125/delayed
US : U.S.: OTC
$ 23.80
+0.58 +2.50%
Volume: 57,306
Nov. 27, 2020 12:57p
P/E Ratio
13.50
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2.10%
Market Cap
$235.43 billion
Rev. per Employee
$458,047
loading...
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HK : Hong Kong
HK$ 0.93
+0.01 +1.09%
Volume: 667,500
Nov. 27, 2020 4:09p
P/E Ratio
10.43
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3.23%
Market Cap
HK$1.45 billion
Rev. per Employee
HK$1.58M
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/zigman2/quotes/206618523/delayed
HK : Hong Kong
HK$ 5.12
+0.06 +1.19%
Volume: 15.74M
Nov. 27, 2020 4:09p
P/E Ratio
7.58
Dividend Yield
3.42%
Market Cap
HK$117.27 billion
Rev. per Employee
HK$2.38M
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/zigman2/quotes/208026094/delayed
CN : China: Shanghai
¥ 15.68
+0.22 +1.42%
Volume: 34.26M
Nov. 27, 2020 3:00p
P/E Ratio
7.34
Dividend Yield
4.27%
Market Cap
¥70.79 billion
Rev. per Employee
¥6.28M
loading...
/zigman2/quotes/201864015/delayed
CN : China: Shanghai
¥ 17.40
+0.51 +3.02%
Volume: 99.59M
Nov. 27, 2020 3:00p
P/E Ratio
7.33
Dividend Yield
4.71%
Market Cap
¥208.24 billion
Rev. per Employee
¥3.77M
loading...
/zigman2/quotes/203851375/delayed
HK : Hong Kong
HK$ 29.70
+0.80 +2.77%
Volume: 7.36M
Nov. 27, 2020 4:09p
P/E Ratio
7.52
Dividend Yield
3.76%
Market Cap
HK$418.17 billion
Rev. per Employee
HK$3.18M
loading...
/zigman2/quotes/205731176/delayed
HK : Hong Kong
HK$ 19.40
+0.62 +3.30%
Volume: 47.30M
Nov. 27, 2020 4:09p
P/E Ratio
N/A
Dividend Yield
5.26%
Market Cap
HK$212.53 billion
Rev. per Employee
HK$30.79M
loading...
/zigman2/quotes/210412581/delayed
US : U.S.: OTC
$ 2.28
-0.11 -4.41%
Volume: 0.00
Nov. 23, 2020 10:44a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$24.93 billion
Rev. per Employee
$3.93M
loading...
/zigman2/quotes/202417326/delayed
HK : Hong Kong
HK$ 34.15
+0.80 +2.40%
Volume: 13.98M
Nov. 27, 2020 4:09p
P/E Ratio
7.90
Dividend Yield
3.50%
Market Cap
HK$243.52 billion
Rev. per Employee
HK$3.68M
loading...
/zigman2/quotes/201656413/delayed
US : U.S.: OTC
$ 5.10
+0.59 +13.08%
Volume: 0.00
Nov. 12, 2020 5:19p
P/E Ratio
9.20
Dividend Yield
N/A
Market Cap
$34.12 billion
Rev. per Employee
$470,019
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/zigman2/quotes/210597971/delayed
JP : Nikkei
26,644.71
+107.40 +0.40%
Volume: 0.00
Nov. 27, 2020 3:15p
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/zigman2/quotes/210598100/delayed
AU : S&P ASX
6,601.10
-35.30 -0.53%
Volume: 491,453
Nov. 27, 2020 5:11p
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/zigman2/quotes/210598069/delayed
KR : Korea Exchange
2,633.45
+7.54 +0.29%
Volume: 1.20M
Nov. 27, 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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