Chinese stocks tumble

China's main stock index tumbled more than 3 percent on Friday as panicked individual investors dumped large-capital shares, worried that authorities were mounting a new drive to cool the market. The Shanghai Composite Index finished 3.29 percent lower at 4,091.445 points. At one stage, it sank as much as 4.88 percent.
Losing Shanghai stocks overwhelmed gainers by 772 to 79, with 103 stocks plunging their 10 percent daily limits. Turnover in Shanghai A shares was 165.5 billion yuan ($21.7 billion), up slightly from Thursday's 160.0 billion.
In recent days several top Chinese state-controlled companies, including PetroChina and China Construction Bank, have revealed plans to conduct initial public offers in the domestic stock market.
Also, regulators approved this week an expansion of the Qualified Domestic Institutional Investor (QDII) scheme, which allows Chinese brokerages and fund managers to invest in Hong Kong shares.
Analysts believe these events show the government is seeking to slow the Chinese stock market's bull run by increasing the supply of shares while diverting some funds overseas. "Investors have become very nervous about policies again," said Chen Jinren, analyst at Huatai Securities. "The IPOs and QDII will affect the market's liquidity supply."
Sinopec Corp, Asia's biggest oil refiner, was among the most active stocks on Friday, plunging 4.03 percent to 14.29 yuan. Many fund managers said they bought stocks on Friday even as the market fell. Analysts think huge amounts of fresh money available to enter stocks, from mutual funds and new individual investors, mean the market may ultimately absorb the IPOs without major difficulty.
Big Shanghai IPOs which are expected to occur within the next three months - those of PetroChina, China Construction Bank and China Mob. That sum is considerably larger than the $12.4 billion which was raised by major Shanghai IPOs in a recent period of heavy fund-raising, the October-December quarter last year. Another large-cap, China Unicom, was the most active stock on Friday, falling 3.87 percent to 5.96 yuan.
Datang Power, whose price had quadrupled since the beginning of this year, slumped its 10 percent daily limit for the second straight day to 35.70 yuan after Deutsche Bank cut its Hong Kong-listed H shares from buy to reduce holdings.
Some banking stocks bucked Friday's downtrend as analysts think upcoming bank listings may perform well and boost the sector as a whole. Pudong Development Bank rose 2.72 percent to 37.39 yuan.