3 Min Read
* SSEC -0.5 pct, CSI300 -0.5 pct, HSI -0.3 pct
* China's IPOs slow further
* China services sector expands at fastest in 4 months in May
SHANGHAI, June 5 (Reuters) - China's stocks fell on Monday morning, as sharp losses in financial firms offset news the securities regulator had cut the number of initial public offerings coming onto the market.
The CSI300 index fell 0.5 percent, to 3,468.12 points at the end of the morning session, while the Shanghai Composite Index lost 0.5 percent, to 3,091.01 points.
The China Securities Regulatory Commission (CSRC) approved on Friday only four IPOs to raise up to 1.5 billion yuan ($220.5 million), down from 7 IPOs in the past week. A larger batch of new listings would weigh on the market by offering more equity supply.
In recent weeks, the CSRC has typically approved a batch of 10 new IPOs each Friday aimed at raising about 6 billion yuan.
"The slower pace of IPOs could be a trend for now," said Yang Weixiao, an analyst with Founder Securities, adding the cooling reflects CSRC's intention to prop up the market that has been hurt by tighter financial regulations and liquidity.
However, the relief was largely offset by sharp losses in financial stocks, in particular bank stocks, whose index is poised for the worst day since mid-December.
There was a lack of fundamental support in the recent strong rally in those banking plays, and the correction now was mainly due to profit taking, Yang said.
The securities regulator had recently published a series of new regulations in a bid to help maintain stability in the stock market, but caution prevailed amid lingering worries over economic growth and tighter regulations.
Market reaction was largely muted to China's services sector expanding at the fastest pace in four months in May.
Main sectors fell across the board in the morning, led by financial and healthcare shares.
In Hong Kong, stocks fell, easing from a near 2-year high.
The Hang Seng index dropped 0.3 percent, to 25,838.21 points.
The Hong Kong China Enterprises Index lost 0.6 percent, to 10,599.65. ($1 = 6.8025 Chinese yuan)
Reporting by Liu Luoyan and John Ruwitch; Editing by Jacqueline Wong