SHANGHAI Dec 12 China stocks suffered their
biggest fall in six months on Monday as blue-chips were knocked
by fresh regulatory curbs to rein in insurers' aggressive stock
investments, while rising bond yields prompted profit-taking in
The blue-chip CSI300 index fell 2.4 percent, to
3,409.18 points, while the Shanghai Composite Index lost
2.5 percent to 3,152.97 points, notching up their biggest
single-day percentage falls since June.
China's insurance regulator, which recently warned it would
curb "barbaric" acquisitions by insurers, said late on Friday it
had suspended Evergrande Life, the insurance arm of China
Evergrande Group, from conducting stock market
That hit the market hard as insurers' relentless buying in
modestly-priced industry-leading blue-chips was one of the main
drivers behind the recent strong advance in the market.
The sell-off was exacerbated by signs of tighter liquidity
in the banking system, signalled by a slump in bond future
contracts, whose prices move inversely with yields.
Growth stocks led Shenzhen-shares lower, with the start-up
stocks index tumbling 5.8 percent to its lowest in 6
months, as the recent steep fall in LeEco's share
price raised concerns over the valuation and growth prospects of
those emerging shares.
All main sectors lost ground, led by real estate
and industry shares.
China Vanke, Gree Electric Appliances
and China State Construction Engineering
, which had soared previously on insurances
companies' enthusiastic share purchases, dropped 6.3 percent,
6.1 percent and 5.0 percent, respectively.
(Reporting by Luoyan Liu and John Ruwitch; Editing by Shri