Business / Markets

Mainland shares drop for first time in three days on economic concerns

(Agencies) Updated: 2016-06-07 08:07

Chinese mainland stocks fell for the first time in three days, led by brokerages and consumer-staples firms, before the release of data that will likely show the world's second-largest economy failing to sustain growth momentum.

The Shanghai Composite Index slid 0.2 percent at the close. CITIC Securities Co paced declines for brokerages after the stock surged more than 7 percent in a week. A gauge tracking mainland firms in Hong Kong rose for a seventh day for the longest winning streak since April 2015. The city's property companies including Wharf Holdings Ltd jumped as traders cut bets for higher US borrowing costs after weaker-than-expected payroll data. The city's currency is pegged to the dollar.

Speculation that Chinese authorities will soon announce the start date for an exchange link with the Shenzhen bourse spurred gains by securities companies and banks last week. Investors are switching attention to the health of the economy, with foreign reserves, trade and inflation data to be announced from Tuesday through Thursday. Mainland markets will be closed after Wednesday for holidays - the Dragon Boat festival.

"The brokers are retreating after a strong rally last week as the market chatter of the stock connect happening this week turned out to be only a rumor so far," said Yen Chiu, a sales trader at China Securities International Financial Holding Co in Hong Kong. "Investors are being cautious ahead of a holiday in China."

The Shanghai Composite fell to 2,934.10. The gauge jumped 4.2 percent last week for the first weekly gain in two months. The Hang Seng China index rose 0.6 percent, while the Hang Seng Index added 0.4 percent.

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