China stocks slide as healthcare, energy firms tumble

SHANGHAI: China stocks slid on Wednesday as healthcare shares extended their plunge over fears of a potential new drug procurement policy, while the energy sector was hit by a steep drop in crude oil prices.

The blue-chip CSI300 index closed down 1.2 per cent at 3,091.13 points, while the Shanghai Composite Index dropped 1.1 per cent to 2,549.56 points.

Caution prevailed across global equity markets amid speculation that the US Federal Reserve might be done with monetary policy tightening after its two-day meeting ends on Wednesday.

Healthcare firms slid for the fourth straight session, with the CSI300 healthcare index plummeting 3.3 per cent to its lowest since early 2017, as investors reacted to policy headwinds including a pilot volume-based drug procurement policy.

Shanghai will be the first to roll out supporting measures for a pilot volume-based drug procurement plan that includes 11 major cities in the country and involves steep price cuts of drugs, domestic news outlet Yicai reported.

Energy firms retreated after a plunge in oil prices on Tuesday, pressured by worries about oversupply and a slowing global economy .

Property shares pared earlier gains to close slightly lower, after a Chinese city removed curbs on property sales, raising speculation of policy loosening in the tightly regulated sector amid an economic slowdown.

There have been very high expectations for supportive measures from Beijing to bolster growth amid an economic slowdown, though investors could be somewhat nervous as President Xi Jinping offered no specific support measures for the economy in a closely watched speech marking 40 years of market liberalisation, said Yan Kaiwen, an analyst with China Fortune Securities.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.51 per cent, while Japan's Nikkei index closed down 0.6 per cent.

At 07:16 GMT, the yuan was quoted at 6.895 per US dollar, 0.01 per cent firmer than the previous close of 6.8959.

The largest per centage gainers in the main Shanghai Composite index were Lushang Property Co Ltd, up 10.09 per cent, followed by DELIXI XINJIANG Transportation Co Ltd , gaining 10.01 per cent and Hefei Taihe Optoelectronic Technology Co Ltd, up by 9.97 per cent.

The largest per centage losses in the Shanghai index were Wingtech Technology Co Ltd down 10 per cent, followed by Shanghai Hugong Electric Group Co Ltd losing 9.96 per cent and Shandong Xinchao Energy Corp Ltd down by 9.95 per cent.

So far this year, the Shanghai stock index is down 22.9 per cent, the CSI300 has fallen 23.3 per cent while China's H-share index listed in Hong Kong is down 13.2 per cent. Shanghai stocks have declined 1.49 per cent this month.

About 10.77 billion shares were traded on the Shanghai exchange, roughly 65.9 per cent of the market's 30-day moving average of 16.33 billion shares a day. The volume in the previous trading session was 11.70 billion.

As of 07:17 GMT, China's A-shares were trading at a premium of 18.49 per cent over the Hong Kong-listed H-shares.

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