Why China Stock Rally Fizzled

China Stocks  Reuters

China stocks surrendered early gains and ended Thursday lower, as financial shares dropped while property plays pared sharp gains on profit-taking.

The blue-chip CSI300 index fell 0.3 percent, to 3,364.49, while the Shanghai Composite Index lost 0.2 percent to 3,104.11 points.

The market was firm in morning trade, aided by a surge in the real estate sector, but selling pressure surfaced in the afternoon as some investors took profit.

The property subindex, which jumped nearly 5 percent in the morning, ended the session up only 1.4 percent.

Data released on Thursday showed signs of fatigue in China's property market. Home prices rose 0.8 percent in July nationwide, but stalled or fell in more cities than in June.

The banking sector fell 0.5 percent while consumer shares lost 0.9 percent.

(Reporting by Samuel Shen and Pete Sweeney; Editing by Richard Borsuk)