SHANGHAI Feb 27 China's blue chips posted their
biggest single-day loss in two months on Monday after the
securities regulator vowed to step up its campaign against
speculation and hinted about loosening its grip on new share
The blue-chip CSI300 index fell 0.8 percent to
3,446.22 points, its sharpest drop since Dec. 23, while the
Shanghai Composite Index also weakened 0.8 percent to
Liu Shiyu, chairman of the China Securities Regulatory
Commission (CSRC), told a news conference on Sunday that the
country will focus on stable development of its capital markets
But limiting or halting initial share sales in order to
stabilise the secondary market doesn't "solve the problems of
long-term healthy development of capital markets," Liu added,
stirring worries of increasing equity supply this year.
The remarks followed a regulator's move over the weekend to
punish the insurance unit of financial conglomerate Baoneng
Group for speculative trading, and a 3.48 billion yuan ($506.96)
penalty on investor Xian Yan for market misbehaviour.
"This shows that regulators are taking a tough stance
against speculative trading," wrote Li Lifeng, analyst at
"This will purify China's share market, but will have a
negative impact on those stocks with excessive valuations."
Baoneng Group's listed units, including Nanning Department
Store, CSG Holding and Jonjee Hi-tech
Industrial and Commercial Holding tanked in response
to the regulator's moves.
Main sectors fell across the board, led by transport shares
Baowu Iron & Steel, previously known as Baoshan
Iron & Steel, shot up 7.4 percent following a one-month trading
halt after its acquisition of smaller debt-laden rival Wuhan
Iron and Steel.
(Reporting by Luoyan Liu and John Ruwitch; Editing by Kim