Shares slide on calls to prevent financial risks

Shanghai stocks dipped today as the central government said it will prevent systemic financial risks and tighten regulations, which casts a shadow over market sentiment.

The Shanghai Composite Index shed 0.21 percent to close at 3,243.69 points.

The government said it will further strengthen supervision and regulation of the financial market, in order to better serve the real economy, according to a meeting of the Politburo.

“Government has put prevention of financial risks into a more important position,” said Yang Tao, assistant director of the Institute of Finance and Banking under the Chinese Academy of Social Sciences. “Financial regulation and supervision will be the top priority in the long-term.”

The government also said it will defuse local government debt risks, regulate financial activities and stabilize the property market in the second half of this year, according to the Xinhua news agency.

Infrastructure companies, brokerages and property developers fell, with Ningxia Building Materials Group Co losing 4.15 percent to 12.02 yuan (US$1.78), Founder Securities Co declining 3.08 percent to 8.80 yuan, and Shanghai New Huang Pu Real Estate Co shedding 2.74 percent to 17.38 yuan.