SHANGHAI: China stocks ended lower on Tuesday, weighed by losses in healthcare stocks on concerns over lofty valuations, while more bond defaults hit sentiment.
The blue-chip CSI300 index fell 0.2%, to 4,894.79, while the Shanghai Composite Index slipped 0.2% to 3,339.90 points.
Falling the most, the CSI300 healthcare index slid 2.7%. Transport firms, in particular shipping and port firms, climbed as news of another promising coronavirus vaccine bolstered sentiment.
Moderna Inc’s experimental vaccine is 94.5% effective in preventing Covid-19 based on interim data from a late-stage trial, the company said on Monday, becoming the second US drugmaker to report results that far exceed expectations.
China’s mutual funds shifted some of their positions to cyclical players for more safety margin as valuations of techs are too high now, said Yan Kaiwen, an analyst with China Fortune Securities.
Yan added the recent bond defaults also hit market sentiment.
Tsinghua Unigroup, a major government-backed player in China’s technology race, has defaulted on a 1.3-billion-yuan ($197.96 million) bond, three sources said, as several high-profile delinquencies by state firms rattled the country’s bond market.
The default by Tsinghua Unigroup, a wholly-owned division of the prestigious Tsinghua University in Beijing, on Monday immediately triggered a credit rating downgrade that is expected to weaken the company’s financial health.
China should set an annual average economic growth target of around 5% for the 2021-2025 period, a senior economist at a Chinese state think tank said on Tuesday.
Separately, a top Chinese securities regulator said on Tuesday that he hoped Sino-US relations will improve under a Biden administration.—Reuters