China’s stocks fell the most in seven weeks after the securities regulator increased the pace of initial public offerings, spurring concern new equity sales will divert funds from existing shares.
Financial companies led declines, with Citic Securities Co. and Industrial & Commercial Bank of China Ltd. dropping more than three percent. The securities regulator said online rumors that the government was considering boosting a stamp duty on stocks were untrue. The ten companies which made their trading debuts on Friday all jumped by the daily limit of 44 percent. Phone company ZTE Corp. jumped 3 percent in Hong Kong after reporting a gain in first-quarter net income.
The Shanghai Composite Index slid 1.8 percent to 4,336.76 at the 11:30 a.m. break, the most since March 3. An increase in new shares may hurt liquidity and comes as the China Securities Regulatory Commission warned investors to be cautious about market risks after a world-beating rally in the past year.