China shares slipped on Tuesday, as there was a lack of catalysts to spur buying and recent signals from Beijing on policy fine-tuning to support economic growth failed to improve appetites for risk. The Shanghai Composite Index was off 0.3 percent at 2,034.57 points. The CSI300 of the leading Shanghai and Shenzhen A-share listings lost 0.4 percent.
The NASDAQ-style ChiNext Composite Index of mainly high-growth, high-tech counters, snapped a six-day winning streak and fell 0.7 percent. The index was 6.6 percent higher than May 16's lowest close this year. The index for Hong Kong listings of China companies on Tuesday had its biggest loss since May 9, pulled down by weaker Chinese bank stocks. The Hang Seng Index closed down 0.1 percent at 22,944.30 points. The China Enterprises Index of the leading offshore Chinese listings in Hong Kong was down 0.4 percent.
On Friday, state media reported that Premier Li Keqiang said pre-emptive fine-tuning of policy to help resolve financing strains for the real economy was needed as China's economy still faced relatively big downward pressure. Chinese banks were among the biggest index drags, with China Merchants Bank down 1.7 percent and Industrial and Commercial Bank of China off 0.2 percent.
Wharf Holdings, a developer and owner of shopping malls in Hong Kong, took the biggest hit among Hang Seng Index components, diving 3.5 percent after mainland media said the city's leader Leung Chun-ying raised the possibility of slowing the flow of visitors. "We can see a striking contrast between strong expectations, stemming from signs of possible easing on money and property policies, and how calm the markets have behaved," said Guo Yanling, senior analyst at Shanghai Securities.
"Investors still lack confidence due to concerns about new IPOs which will end up diluting capital," she added. By midday, the Hang Seng Index was down 0.2 percent at 22,917.53 points. The China Enterprises Index of the top Chinese listings in Hong Kong shed 0.5 percent. The CSI300 of the leading Shanghai and Shenzhen A-share listings fell 0.2 percent, while the Shanghai Composite Index was also down 0.2 percent at 2,037.04 points.
Premier Li Keqiang had said last week pre-emptive fine-tuning of policy to help resolve financing strains for the real economy was needed as China still faces relatively big downward pressures. Meanwhile, central bank governor Zhou Xiaochuan said the People's Bank of China should continue prudent monetary policy. It should create a good monetary and financial environment to deepen reforms and support the local economy's development, Zhou was quoted as saying on the central bank's website on Tuesday.
CSPC Pharmaceutical Group Ltd lost 5.8 percent after the company said its major shareholder Joyful Horizon agreed to sell about 12 percent of shares to third parties. The stock was also the most actively traded in the Hong Kong market during the morning session. Top percentage loser among H-shares was CITIC Securities , down 2.9 percent after it hit a more than one-month closing high on Monday. Midday bourse volume in Hong Kong remained weak and below its 20-day average for the third day. "The market needs some encouragement", said Linus Yip, strategist at First Shanghai Securities in Hong Kong. "The buying interest is not too strong and the selling pressure is not too strong also."
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