SHANGHAI Dec 5 China's blue-chip shares index
posted its biggest fall in six months on Monday after the top
securities regulator warned against "barbaric" share
acquisitions, though small-caps held relatively firm as an
investment scheme linking the Shenzhen and Hong Kong markets
The blue-chip CSI300 index fell 1.7 percent to
3,469.41 points, while the Shanghai Composite Index lost
1.2 percent to 3,204.71.
Nearly all main sectors lost ground, with real estate
and infrastructure shares the hardest
hit, falling 3.7 percent and 4.0 percent, respectively.
Industry-leading blue-chips including Gree Electric
and China Vanke, which had previously
soared on share purchases by insurers, tumbled after Liu Shiyu,
chairman of the China Securities Regulatory Commission (CSRC) on
Saturday condemned "barbaric" leveraged buy-outs by certain
More than 20 stocks fell by their 10 percent daily trade
limit, a rare scene since June when stocks plunged after Britain
voted to leave the Europe Union.
Chinese markets had been trending higher, bolstered by a
heated buying in modestly-valued big-caps.
The tech-heavy ChiNext sub-index which is the
equivalent of the Nasdaq, was down 0.1 percent after
Shenzhen-HK stock connect launched on Monday.
Market analysts said investors were looking to rotate into
small-caps via the connect scheme, moving away from blue-chips
after the stern comments by the regulator.
(Reporting by Luoyan Liu and John Ruwitch; Editing by Kim