China Stocks Rally Fizzles as Smallcaps Slump on IPO Concern
- New stock offers may spur investors to sell existing shares
- Brokerages rally as trading jumps, margin trading rebounds
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A rally for Chinese stocks fizzled as technology and small-company shares plunged on concern the resumption of initial public offerings will lure investors away from the nation’s priciest equities.
The Shanghai Composite Index slipped 0.1 percent to 3,604.80 at the close, erasing a gain of as much as 2 percent. Technology stocks, the best performers this year, posted the steepest loss among industry groups, while the ChiNext index dropped the most in a month. The small-caps index is four times more expensive than the large-cap Shanghai gauge. Brokerages rallied on speculation a jump in trading since the nation’s equities entered a bull market this month will bolster their earnings prospects.