China stock traders befuddled by headline shocks as state-run media adds complexity to market policies
- Days after being spooked by online gaming news, reports warned of risks associated with growth hormone and e-cigarette consumption among children
- Liquor stocks and vaping-device makers saw big swings in stock prices in mainland and Hong Kong markets, overnight losses in New York
Just days after a commentary by Economic Information Daily jolted online gaming stocks, two articles by the state-run Xinhua News Agency and a post by the Ministry of Science and Technology swayed sentiment and triggered another bout of volatility.
The Xinhua reports highlighted the harm of growth hormone to children and the hazard of electronic cigarettes to teenagers, rattling investors who fear the US$1.3 billion industry will be the next target of state scrutiny. The science ministry separately published a report citing a foreign research that linked alcohol consumption as a cause of cancer.
“After the last few weeks, even oblique warnings from authorities are ignored at your peril,” said Jeffrey Halley, an analyst at Oanda. “It seems that regulatory risk is alive and well in China still.”
Changchun High-Tech Industries, which produces growth hormone, tumbled by the 10 per cent daily limit in Shenzhen. China’s three biggest liquor distillers including Kweichow Moutai and Wuliangye Yibin fell by as much as 3.1 per cent. Smoore International, a maker of vaping devices, slumped as much as 7.8 per cent in Hong Kong before closing 1.9 per cent weaker.
