Large IPOs and talk of cooling measures bring China markets down

After a day of volatile trading, Chinese markets plunged by the largest drop in 8 months, driven by concerns that the world's largest IPO in 16 months will eventually weigh on the Shanghai index, and that the government might finally act to control the flow of hot money.

The Shanghai Composite ended down 5.1 percent. The Hang Seng Index fell 3.2 percent, with the Hang Seng China Enterprises Index sinking 4.3 percent. Taiwan's Taiex slid 0.8 percent.

There were RMB7.4 trillion yuan of new loans in the first half of 2008, equivilent to about half of the country's GDP for the same period, prompting economists to call on the central bank to tighten up monetary policy for fear of asset bubbles. Though the government gave no sign of change today, analysts predicted it will soon.

China Cosco Holdings Co., (SH:601919, HK:1919) the world's biggest operator of dry-bulk ships, sank 6.7 percent in Hong Kong and 8.36 in Shanghai after issuing a profit warning predicting a loss. PetroChina (SH:601857, HK:0857) lost 5.99 percent in Shanghai and 3.9 percent in Hong Kong after last night's news that China is cutting fuel prices

Two IPOs

China State Construction Engineering Corp. (SH:601668) shares ended 56 percent up from their offering price. The US$7.3bn offering.

In Hong Kong, BBMG Corp (HK:2009), a large manufacturer of construction materials, jumped 60 percent from its opening price in its IPO today.

Metal producers down

Non-ferrous metal stocks dropped 8.14 percent on average.

Henan Yuguang Gold & Lead (SH:600531), Zhuzhou Smelter Group (SH:600961), Baoji Titanium Industry (SH:600456) all plunged to the 10 percent trading floor.

Jiangxi Copper (SH:600362, HK: 0358) lost 8.95 percent in Shanghai and 8.52 percent in Hong Kong. Chinalco (SH:601600, HK:2600) declined 8.36 percent in Shanghai and 5.91 percent in Hong Kong.

Real estate stocks sink

Property stocks lost 6.99 percent on average on mainland markets. The Hang Seng Property Index lost 3.63 percent.

CC Land Holdings Limited (HK:1224), dropped 11.85 percent. Hopson Development Holdings (HK:0754) dropped 8.12 percent. SRE Group Ltd. (HK:1207) dropped 7.1 percent.

Over a dozen stocks plunged to the 10 percent floor on mainland markets including Zhejiang Guangsha (SH:600052), Wolong Real Estate Group (SH:600173) and Beijing Huaye Realestate (600240).

The largest two developers, China Vanke (SZ:000002) and Poly (SH:600048), declined 7.3 and 8.7 percent, respectively.

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