Stocks slide as data fails to lift sentiment

China's manufacturing sector data failed to ease concerns about capital outflows as investors continued to stay away, bringing down Shanghai shares for the third straight day.

The benchmark Shanghai Composite Index lost 1.04 percent to 2,302.42.

China's six most active exchange-traded funds that track indexes measuring the performance of blue-chip shares have seen 5.37 billion yuan (US$877 million) of redemption this month, the Securities Times reported yesterday, citing data from the Shanghai and Shenzhen exchanges.

Analysts said the redemption indicated a bout of profit-taking by institutional investors pessimistic about the outlook of blue chips.

Fears that new share sales will divert funds from existing shares also weighed on the market as three companies started to take subscriptions for their initial public offerings yesterday. Six other companies will start taking subscriptions from today.

The stock market fell yesterday despite data showing the flash HSBC manufacturing purchasing managers' index rose to a three-month high of 50.4 in October, slightly up from a final reading of 50.2 in September.

But the sub indexes were not as encouraging as the headline index, with new orders sub-index edging down to 51.4 from 51.5 in September and new export orders falling to 52.8 from 54.5.

Gold shares declined after gold prices eased from a six-week high on stronger US dollar. Zhongjin Gold fell 3.2 percent to 8.26 yuan. Zijin Mining Group lost 3.2 percent to 2.43 yuan.