CHINA’S shares fell sharply yesterday on worries the government will impose fresh controls on the property sector.

    The benchmark Shanghai Composite Index ended down 1.75 percent to 2,076.69. The Shenzhen Composite Index finished the day 0.07 percent lower at 1,134.19.

    The market was concerned about new curbs on loans to property developers after domestic media said that an Industrial Bank internal document said it had stopped lending to the sector because of risk.

    Gains in new home prices moderated for the first time in a year in January because of slower demand and tighter mortgages, the latest data showed yesterday. Prices were up 8.98 percent year on year in January, according to calculations based on official data.

    Poly Real Estate Group dropped 8.38 percent, China Vanke fell 6.6 percent and Gemdale Corp. slid 7.5 percent. Industrial Bank Co. was down 3.70 percent.

    Related companies including urbanization, cement, construction and coal, saw their shares suffer.

    The concerns over property will have a short-lived affect on the broader market, analysts said.

    “We’re mostly focused on news from local media that big banks are stepping back on loans in the sector,” Shenyin Wanguo Securities analyst Qian Qimin said. However, “liquidity is ample and the market has already fallen a lot — valuations are quite low — so the losses in property shouldn’t bring down the market too much,” he said.

    Investors are “too pessimistic,” United Securities analyst Pei Xiaoyan added. The property market “doesn’t have any structural risks and the government wouldn’t clamp down too tightly on an area so important for China’s economy,” he said.

    In addition, market weakness reflects a shift toward a consumption-driven economy. “Naturally, there will be less buying of stocks in traditional sectors and increased buying in new sectors such as media — which is up today,” Pei said.

    Health-care devices companies shares rose. Andon Health Co. Ltd., whose products include electronic blood-pressure meters, was up at the daily 10 percent limit. Guangdong Biolight Meditech Co., which makes heart monitors and other instruments, was also up the daily limit.

    (SD-Agencies)