CHINA’S stocks fell yesterday as property developers slumped after some of the nation’s biggest cities introduced real estate curbs, overshadowing a rebound for industrial companies’ profits.

    The Shanghai Composite Index slipped 0.73 percent, erasing a gain of as much as 1 percent, while the CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.88 percent to 3,169.73.

    Shenzhen joined Shanghai in introducing measures late last week to tame soaring real estate prices, including increasing down payment requirements. Industrial profits broke a seven-month losing run to climb 4.8 percent in the January-February period.

    Property prices in the largest Chinese cities have begun to diverge severely from values in less-populated areas, spurring People’s Bank of China Governor Zhou Xiaochuan to warn domestic banks this month about increased credit risk from this trend.

    Shenzhen will also limit local residents to purchases of two homes, while Shanghai will tighten approval criteria for non-resident homebuyers and ban unregulated lending.

    “Developers are facing some headwinds as these measures are likely to cause immediate negative impact on the demand side,” said Wu Kan, a fund manager at JK Life Insurance in Shanghai. “The market is in the stage of building a bottom, so we’ll see lots of ups and downs.”

    Domestic media also reported that financial regulators in the eastern province of Zhejiang had begun to closely scrutinize real estate financing.

    Major developers, including Gemdale Corp. and Poly Real Estate, closed lower, apparently on fears that real estate curbs, already adopted in Shanghai and Shenzhen, could spread to other cities in the country.

    (SD-Agencies)