China stocks tumble as gold shares drag; still set for monthly gain

China and Hong Kong stocks tumbled on Friday after a sharp drop in gold prices sparked a broad-based selloff ‌across the markets, while state media warned against speculative trading. ** By the midday break, the Shanghai Composite Index declined 1.2% to 4,108.46, after losing ⁠as much as 2.2% earlier in the day.

** The blue-chip CSI 300 Index was down 1% after an earlier drop of as much as 2.2%. ** Losses were spread across the board, with gold-related shares ​seeing the biggest selloff after a sudden retreat in bullion prices from record highs.

** Sentiment was ‍further dented after the state-owned Securities Times warned against the rally, while regulators including the Shanghai Gold Exchange announced news measures such as raising margin requirements to curb speculation. ** "The regulatory authorities' timely intervention is aimed at preventing potential risks ⁠from an ‌overheated market," the newspaper wrote. "For ⁠ordinary investors, it's better to view it rationally rather than blindly chasing higher prices."

** The CSI SSH gold equity ‍index and the CSI SWS non-ferrous metal index both tumbled roughly 8.7%. ** Miner Chifeng Gold, Shandong Gold and Zhongji ​Gold all plunged by their daily trading limit of 10%.

** Among other losers, the rare ⁠earth index lost 6.5% and the liquor distillers weakened 2.9%. ** The property sector weakened 3.4%, paring the sharp rally on Thursday ⁠after China reportedly dropped the borrowing limits on developers known as its "three red lines" policy.

** Despite the declines on Friday, the Shanghai benchmark was up 3.5% so far in January, heading for ⁠its best monthly gain since August. The blue-chip CSI 300 Index has climbed 1.6% for the month. ** ⁠In Hong Kong, ‌the benchmark Hang Seng Index slid 1.8% to 27,469.82, and the Hang Seng Tech Index also weakened 1.8%.

** The Hang Seng Materials index tumbled 8.3%. Shares ⁠of Zijin Mining dropped 8.6%.