* HSI -1.1 pct, H-shares -2 pct, CSI300 -1.8 pct
* China property curbs to stay, raising fears of no policy
* A/H premium index nearly back at parity after H-share
* Railway, infrastructure sectors among hardest hit
By Clement Tan
HONG KONG, Nov 13 Onshore Chinese shares slid to
a seven-week low and weighed on Hong Kong stocks on Tuesday
after state media reported that housing market curbs will
remain, raising fears that the ongoing party congress will spawn
little change in economic policies.
Several news outlets reported that China's housing minister
told reporters on Monday on the sidelines of the 18th Communist
Party congress meeting, which ends on Wednesday, that he does
not expect any loosening of the sector's restrictions.
Turnover in Hong Kong rose more than 13 percent from Monday,
but was still some 8 percent below the 30-day average. Traders
said festering uncertainty over the U.S. fiscal situation and
further aid to debt-stricken Greece kept many investors on the
The Hang Seng Index ended down 1.1 percent at
21,188.7. The China Enterprises Index of the top Chinese
listings in Hong Kong dived 2 percent. Tuesday's losses took
both indices to their lowest closes since mid-October.
In the mainland, the CSI300 Index of the largest
Shanghai and Shenzhen listings sank 1.8 percent. The Shanghai
Composite Index fell 1.5 percent. Both indices ended at
their lowest since late September.
Investors are taking the continuation of housing curbs "as
perhaps a sign there won't be any loosening or changes in
Beijing's economic policy positions in the near term," said Hong
Hao, chief equity strategist at Bank of Communications
"A lot of the money that has come into offshore Chinese
equities in the last nine weeks has gone into the cyclical
names, betting on stronger growth from policy changes, but I
think they will be disappointed," Hong added.
The China Enterprises Index, or the H-share index, has shed
5.6 percent from a Nov. 2 high. It had surged 14 percent in
September and October, ranking among the top performing indices
in those two months.
Since Nov. 2, there's been a 4.1 percent loss on the CSI300
Index and a 3.3 percent slide on the Shanghai Composite.
The H-share underperformance has moved the Hang Seng Index
A/H premium index back to near parity.
It is now at 99.9, the highest since Oct. 17 after having
traded below 100 for more than three weeks. This suggests the
premium that onshore markets typically trade over offshore peers
could return if H-shares continue to underperform A-shares.
Shares of Chinese oil giants were put on the defensive due
to falling oil prices.
Chinese media reported on Tuesday that Beijing could cut
gasoline and diesel prices in the mainland for a fourth time
this year, perhaps as soon as Wednesday.
In Hong Kong, China Petroleum and Chemical (Sinopec) Corp
lost 3 percent, while CNOOC shed 0.9 percent
and Petrochina fell 1.9 percent.
CHINA POLICY FEARS DRIVE LOSSES
On Tuesday, growth-sensitive sectors whose performance is
seen linked to the Chinese property sector suffered the brunt of
the losses after the state-run China Daily newspaper reported
the country's housing minister as also saying that Beijing is
"actively studying" expanding property tax beyond Chongqing and
While these statements did not offer anything new, they
compounded jitters that no policy changes will emerge from this
meeting that marks the formal start of a once-in-a-decade
political transition. The new Politburo Standing Committee
lineup is expected to be announced on Thursday.
Chinese railway and infrastructure-related counters, which
led a rally in September and October, trimmed 2012 gains. China
Railway Group dived 6.2 percent from Monday's near
19-month high in Hong Kong. It is still up 69 percent this year.
Zoomlion Heavy Industry shed 3.4
percent in Hong Kong and 1.3 percent in Shenzhen. Zoomlion was
among the top performers among Chinese growth-sensitive names in
Hong Kong, and surged more than 25 percent in September and
The Shanghai property sub-index was down 2.1 percent
on Tuesday, with Poly Real Estate off 1.4 percent.
Shenzhen-listed China Vanke shed 2.2 percent.
In Hong Kong, China Resources Land lost 1.5
percent, trimming its 2012 gains to 45 percent.
Official data for October housing prices is expected on
Sunday. But in a sign of things to come, the state-run China
Securities Journal, citing data from the Beijing Municipal
Bureau of Statistics, reported that the capital's property sales
in the first 10 months of 2012 surpassed full-year sales in