(Bloomberg) — Chinese shares are headed for their worst start to the new year since 2019, as investors took profit on some of their most successful bets in 2021.
The benchmark CSI 300 index dropped as much as 1.3% earlier Tuesday, led by declines in renewable energy and healthcare firms, on track for its weakest opening session in three years. It has since narrowed its losses to 0.8% before the midday break. Both Trina Solar Co. and Asymchem Laboratories Tianjin Co. fell by the 10% daily trading limit earlier.
The Nasdaq-style ChiNext board in Shenzhen lost as much as 2.5%, weighed by battery maker Contemporary Amperex Technology Co.’s 4.2% loss.
The losses came after Beijing said it will terminate the government’s subsidy policy for new-energy vehicle purchases from 2023. Investor mood also turned cautious after China’s central bank cut its net supply of funds to markets by the most in three months, a disappointment for investors hoping for more monetary easing.
“There looks to be more of the same thing that happened last year, with institutional money moving out of the hottest stocks because the positives have been largely priced in,” said Gao Shan, chief investment officer at Shanghai Universal Wisdom Fund Ltd. “This time, its renewables and EV shares that are most apparent.”
CATL was the most held firm by institutional investors toward the end of last year, while seven out of the top 10 gainers on the CSI 300 in 2021 were linked to the renewable energy sector. Trina Solar was among them, delivering a 241% gain.
In Hong Kong, the Hang Seng Tech Index shed as much as 1.6% after Beijing asked the nation’s large-size tech firms to apply for security checks before seeking overseas stock listings.
Mainland investors sold a net HK$669 million ($86 million) worth of Hong Kong stocks Tuesday via trading links as of the midday break, while offshore investors offloaded 1.9 billion yuan ($299 million) worth of onshore stocks, set for the most since mid-December, according to Bloomberg-compiled data.
(Updates with investor comments and details on renewable stocks)
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