China stocks tumble as tech firms sink

Bloomberg

China’s benchmark stock gauge suffered its first drop of more than 1% in six weeks after a state-backed fund said it would reduce its stakes in some tech companies.
The Shanghai Composite Index closed down 1.4% on Monday, its biggest decline since November 11. The CSI 300 Index slumped 1.3%, its fourth consecutive retreat, with technology-related shares leading the losses.
Three stocks that have surged at least 73% this year tumbled after the state-backed China Integrated Circuit Industry Investment Fund said it would reduce its holdings in them.
Goke Microelectronics Co fell by the 10% daily limit, while Shenzhen Goodix Technology Co dropped 5.1% and GigaDevice Semiconductor Beijing Inc slumped 6.7%.
The stake cuts were seen sending a bearish signal to investors. “The drop today was mainly due to mutual funds using the state fund cutting stakes as a catalyst to lock in gains before year’s end,” said Wu Yuefeng, fund manager at Funding Capital Management (Beijing) Co“Investors are pricing in for the worst in the immediate term.”
Baijiu-related shares also retreated fell, with Jiugui Liquor Co. tumbling by the daily limit after denying Chinese media reports that it added a sweetener to its products. Shede Spirits Co. and Anhui Yingjia Distillery Co. dropped at least 3%.