China’s stocks fell to the lowest level in three weeks, led by financial companies and liquor makers, amid concern weakness in the property market and curbs on interbank borrowing will worsen the economic slowdown.
China Vanke Co. and Poly Real Estate Group Co. paced declines for developers after new-home prices climbed in 44 of the 70 cities tracked by the government, the fewest since October 2012. China Minsheng Banking Corp. slid the most in two weeks as UBS AG said it was cautious on the lender’s shares after the government ordered interbank borrowing restrictions. Wuliangye Yibin Co. plunged 2.7 percent after the China Securities Journal said the liquor producer cut retail prices.
The Shanghai Composite Index (SHCOMP) fell 0.9 percent to 2,008.22 at 9:44 a.m. The ChiNext index dropped 0.4 percent, extending losses after entering a bear market on May 16. The property data add to concerns the economic slowdown is deepening after reports last week showed unexpected decelerations in industrial-output and investment growth, according to Zheshang Securities Co.
“Home prices released over the weekend weren’t good and it has created investor expectations that home prices will continue falling,” said Zhang Yanbing, an analyst at Zheshang Securities. “The government’s curbs on interbank borrowing will weigh on property companies too. The Chinext hasn’t bottomed and most importantly, after last week’s economic data, it simply shows the economy isn’t recovering.’
The CSI 300 Index slid 1.1 percent today, while the Hang Seng China Enterprises Index dropped 1.2 percent. The Shanghai measure has lost 5.1 percent this year on concern the growth slowdown will curb earnings and the potential resumption of initial public offerings will divert funds. The regulator hasn’t approved any listing of IPO shares since January as it reforms the process to make offerings more market-oriented.
Source: Bloomberg
Source: Bloomberg
