China's stocks slumped the most in two months, led by property developers, correcting gains from the markets' recent climbs.
The Shanghai Composite Index fell 2.9 percent to 2,319.44. The Hang Seng Index dropped 3.8 percent to 12,945.40. The Hang Seng China Enterprise Index, which tracks so-called H-shares, retreated 4.9 percent to 7,193.33.
There were advances.
Zijin Mining Group Co. (02899 HK), China's largest gold producer, climbed 5.8 percent after the provincial government of Fujian awarded it special status as a "New and high technology enterprise in Fujian" reducing its profit tax to 15 percent for the following three years (including last year).
Foshan Plastics Group Co. (000973,SZ) dropped by its 10 percent trading limit, after gaining 91 percent so far in 2009.
Guihang Automotive Components Co.(600523,SH) a manufacturer of automobile components, surged by its fifth 10 percent daily cap in a row after the company announced its plan to issue up to 110 million shares at the price of RMB 8.03 per share to China National Guizhou Aviation Industry Co Ltd and Guizhou Gaike Aerospace Mechanical & Electrical Co Ltd.
Rizhao Port Co. (600017,SH), China's largest port for handling iron ore, jumped by the 10 percent daily limit. The company will ask shareholders to approve a private share placement of up to 300 million shares to raise funds for expansion.
ZTE Corp. (00763 HK), China's second-biggest telephone network equipment maker, advanced 4 percent.
Property down as China moves to stabilise prices
Property shares dropped 5.71 percent today on the release of China's real estate stimulus plan, which seems intended to stabilise rather than revitalise the industry.
Beijing Vantone Pioneer Real Estate Co (SH:600246) lost 9.65 percent, while China Vanke Co (SZ:000002), China's largest listed developer, dropped 5.05 percent. Poly Real Estate Group Co (SH:600048), the second-largest, dropped 4.44 percent.
The plan, the last of the ten economic stimulus packages released by Beijing, includes lowered housing loan rates and related taxes but Beijing asked local governments not to stimulate the housing market further.
In 2008, the industry contributed 13 percent of the nation's GDP growth, with property moguls making up six out of the 10 richest Chinese people.
However, the property income rate (the number of years earning an average income it takes to buy a house) for urban Chinese was 15 in 2007, compared to just six in the US.
The Chongqing municipal government spent RMB10bn supporting house purchases last July and recently started refunding income tax for house buyers. Beijing suspending the policy this month as it counters any local policies that keep property prices high.
Longxin Real Estate, the fourth-largest developer in Chongqing, has now been selling houses at a 30 to 50 percent discount.