Chinese shares dip amid investors worry over policymakers comment

China stocks retreated from a 13-month high on Monday as comments from top policymaking bodies raised investor fears that Beijing will slow the pace of policy easing after some signs of stabilisation in the world's second-largest economy.

The CSI300 index fell 2.0 per cent to 4,037.35 points by the end of the morning session, while the Shanghai Composite Index lost 1.4 per cent to 3,225.40. ** China will maintain policy support for the economy, which still faces "downward pressure" and difficulties after better-than-expected first quarter growth, a top decision-making body of the Communist Party said on Friday.

But it also said authorities will try to strike a balance between stabilising economic growth, promoting reforms and controlling risks. ** It added that China will push forward structural deleveraging and prevent speculation in the property market, suggesting attention may be turning back to debt risks that any further substantial stimulus measures may create.

The statement from the Politburo came two days after China reported steady 6.4 per cent annual growth in January-March, defying expectations for a further slowdown, as industrial production jumped sharply and consumer demand showed signs of improvement. While analysts cautioned it was too early to call a turnaround, some market watchers lowered their expectations of further support measures. ** The trend of marginal tightening in China's monetary policy is quite clear, as the politburo meeting mentioned "structural deleveraging" again and as the central bank drained liquidity via open market operations recently, Shanxi Securities noted in report.

Corrections would happen going forward as the stock market returns to rationality, the brokerage added. ** Investors still need to wait for the best time to buy stocks, as the pace of money flowing into the stock market could slow in the short-term due to Beijing's counter-cyclical adjustments, CITIC Securities wrote in note.

Developer-led the fall, with the CSI300 real estate index tumbling 4.9 per cent, poised for its worst session in six months. ** Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.29 percent while Japan's Nikkei index was down 0.04 percent.

The yuan was quoted at 6.7127 per U.S. dollar, 0.12 per cent weaker than the previous close of 6.7049. ** The largest percentage gainers in the main Shanghai Composite index were Chengdu Xuguang Electronics Co Ltd , up 10.05 percent, followed by Beijing Jingcheng Machinery Electric Co Ltd, gaining 10.05 percent and Liaoning Hongyang Energy Resource Invest Co Ltd, up by 10.03 percent.

The largest percentage losers in the Shanghai index were Aurora Optoelectronics Co Ltd, down 10.02 per cent, followed by Koal Software Co Ltd, losing 9.99 per cent and Zhejiang Huayou Cobalt Co Ltd, down by 8.84 per cent. ** So far this year, the Shanghai stock index is up 31.15 per cent, while China's H-share index is up 16.2 per cent. Shanghai stocks have risen 5.83 per cent this month.