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China Stocks are Expected to Weaken Further

Stock investors watch stock movement at a stock exchange in Chengdu, China.
AP
Stock investors watch stock movement at a stock exchange in Chengdu, China.

China stocks are expected to weaken further after losing 2.1 percent last week.

The Shanghai Composite slid 1.44 percent to end at 2344.52 on Friday. More than two thirds of the sixty brokerages surveyed by the Securities Daily are bearish on markets this week, citing the falls in international markets as cause for concern.

Market Factors:

Premier Wen Jiabaosays stabilizing growth must be given more priority -- the comments were made at a review of six provinces' economies.

Securities regulators say they will not stop IPOs to prop up the market. The CSRC will review another eight IPOs this week, after approving 9 last week. The number of IPOs waiting for regulatory approval is nearly 700.

Stocks to Watch:

PROPERTY STOCKS

State media reports several cities have eased restrictions on housing accumulation fund loans to help home buyers.

RAILWAY RELATED STOCKS

The Ministry of Railways has issued guidelines to promote private investment in the railways sector. The new rules come after government investment in railways almost halved in the first four months of the year.

CHONGQING BASED STOCKS

Chinese media reports that central government backed firms signed deals worth a record 300billion yuan with the city of Chongqing last week. It's seen as a deliberate boost to the western city's economy in the wake of the recent Bo Xilai scandal.

—By Cheng Lei, CNBC Asia Pacific