CHINA’S stocks tumbled in afternoon trade yesterday, despite positive official economic data, as a recent post-rout, government-triggered rebound appears to be running out of steam.

    The CSI300 Index tumbled more than 5 percent at one point, but eased some losses to end the day down 3.5 percent at 3,966.76. The Shanghai Composite Index lost 3 percent to 3,805.70 points. The Shenzhen Composite Index was 4.22 percent lower at 2,058.84.

    The slide highlights the ongoing difficulty the government faces as it seeks to restore confidence in the stock market without signalling investors that it is guaranteeing zero-risk free for all, which would simply reinflate a rally that even regulators said had become too frothy.

    “Sentiment is still weak,” said Du Changchun, analyst at Northeast Securities in Shanghai, adding that he believed most investors were selling off to cash in on a brief if sharp rally that pushed up indices more than 10 percent last week.

    The souring sentiment caused index futures to go negative across the board.

    China CSI300 stock index futures for July fell more than 4 percent, while the futures tracking small cap CSI500 index saw most contracts near their 10 percent daily downside limit.

    The fall comes as a fresh batch of companies resumed trading yesterday, leaving only about 25 percent of shares on trading halts, down from over half during the rout.

    Better-than-expected Chinese economic data yesterday failed to impress some investors. The economy grew an annual 7 percent in the second quarter.

    “Investors liquidated their positions as the economic data failed to impress while domestic consumption showed no sign of improvement,” said Steven Leung, a director at UOB Kay Hian in Hong Kong.

    Shenzhen’s startup board ChiNext lost 4.99 percent. Infrastructure and health care stocks fell sharply. (SD-Agencies)