2014.12.1805:44:11UTC+00Chinese stocks retreat from 4-year high as BYD drops, IPO weighs

Chinese stocks retreated from a four-year high as BYD Co. plummeted with IPO shares weighed on investors shoulders.

The Shanghai Composite Index shed 0.1% to 3,057.52 at the end of trade. The Hang Seng China Enterprises Index added 0.5% while Hong Kong’s Hang Seng Index climbed by 1.1% following the Federal Reserve promises to keep patient in hiking interest rates.

Berkshire Hathaway Inc.’s BYD Co., owned by Warren Buffett, plummeted by 47%. Citic Securities Co. along with Haitong Securities shed more than 3% each following reduced rates from BNP Paribas SA. Meanwhile, Jiangxi Copper Co. along with China Oilfield Services Ltd. added at least 2% to become leaders among the metal and energy producers.

According to Shenyin & Wanguo Securities Co., the mainland IPO shares locked up funds with investors approximately placing as much as $493 billion or 3 trillion yuan for 12 initial public offerings from today and December 25.

US stocks surged to its biggest advance since 2013 after the announcement of Fed Chair Janet Yellen regarding the hiking of interest rates. She stated that the Federal Reserve is unlikely to change its policies prior to the end of April next year. Borrowing costs will also keep its low levels for a considerable amount of time.

Strategist at Zheshang Securities Co., Wang Weijun, commented to Bloomberg that the IPOs have driven assets into a liquidity squeeze. Weijun adds that despite this, stocks are still unlikely to witness a correction in the near future.