Chinese stocks drop as Beijing’s support measures disappoint

Chinese stocks fell on Tuesday as investors dumped energy and technology shares, disappointed by regulators’ slew of measures designed to arrest a market slide.

The blue-chip CSI300 Index and the benchmark Shanghai Composite Index both dropped roughly 1% in early trade, giving up Monday’s gains. Hong Kong benchmark Hang Seng was roughly flat.

Chinese regulators on Monday rolled out a handful of measures, from conducting swap operations to upgrading a lending facility for stock buybacks by listed companies, as part of efforts to stabilise struggling capital markets.

The policy rollout came after an 8.5% slump in the CSI300 in October, its worst monthly performance in more than a decade, as a selloff in technology stocks weighed on sentiment.

“These measures were below expectations,” said Chen Jiande, fund manager at Fujian Tianlang Asset Management Co.

“Many investors in battered tech shares are taking advantage of any rebound to rush out.”

The tech-focused STAR Composite Index dropped 1.6%.

Investors also remain jittery over the financial health of state-owned developer Zhuhai Huafa Group, after media reported it was seeking extensions on some bank loans.

Government bond yields held steady in early trade, with the 10-year and 30-year notes edging down about 0.3 basis points each.