Most China stocks fell, with the benchmark index capping the biggest monthly loss since January, on concern government measures to curb property speculation will slow economic growth and hurt domestic consumption.
Poly Real Estate Group Co. fell to a 13-month low. Kweichow Moutai Co., the country’s biggest producer of baijiu liquor by market value, slid 3.9 percent. Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. rose at least 1 percent after posting the largest first-quarter profits among the world’s banks.
About three stocks fell for each one that rose on the Shanghai Composite Index, which gained 2.18, or 0.1 percent, to 2,870.61 at the close. The CSI 300 Index added 0.2 percent to 3,067.36. The CSI Smallcap 500 Index fell 2.7 percent. China’s markets will be shut on May 3 for a holiday.
“The market is pricing in the aftermath of the crackdown on the property market,” said Wang Zheng, a fund manager at Jingxi Investment Management Co. in Shanghai. “I don’t see any construction or investment boom in the next two to three years as a decline in property prices is very likely.”
Futures on the CSI 300 expiring in May, the most active contract, lost 0.8 percent to 3,089.8.
The Shanghai Composite has plunged 7.7 percent this month, the biggest decline since January, as the government unwound monetary stimulus and stepped up measures to prevent a housing bubble inflated by record lending last year. It has slumped 12 percent in 2010, the world’s second-worst performer.
The AlphaShares Chinese Volatility Index, a measure of implied volatility on stock exchanges in China and Hong Kong, has risen 13 percent this week after Standard & Poor’s cut Greece’s credit rating to junk and downgraded Portugal. The index is based on options prices, and assesses near-term expectations for the magnitude and rate of price moves.
Poly Real Estate, the second-largest developer by market value, lost 0.3 percent to 12.35 yuan, its lowest close since March 2009. Gemdale Corp., the fourth largest, dropped 0.7 percent to 12.15 yuan. An index tracking developers on the Shanghai Composite lost 0.4 percent, capping a 16 decline for the month.
“The market is still worried about the impact of the clampdown on the property market on economic and earnings growth given its share in the whole economy,” said Wei Wei, an analyst at West China Securities Co. in Shanghai.
China has ordered higher mortgage rates and down-payment ratios since data showed property prices jumped a record 11.7 percent in March. The government has also raised banks’ reserve requirements, set a target of a 22 percent reduction in new lending this year, barred loans for third-home purchases and reinstated a sales tax on homes.
Moutai slid 3.9 percent to 129.03 yuan, the lowest since June 2009. Shanghai Bailian Group Co., the listed unit of China’s biggest retailer, lost 5.6 percent to 15.13 yuan. Wuliangye Yibin Co., China’s second-biggest maker of white liquor by market value, dropped 1.5 percent to 26.29 yuan.
ZTE Corp., China’s second-biggest phone-equipment maker and which counts India as its largest overseas market, slumped 8 percent to 37.25 yuan. The Indian government has rejected proposals from operators to purchase Chinese equipment on national security grounds, the Financial Times reported today, citing correspondence from India’s Department of Telecommunications to the Prime Minister’s Office.
Margrete Ma, a spokeswoman for ZTE, said the company is looking into the situation. She declined further comment. A.K. Srivastava, a deputy director general at India’s Department of Telecommunications, declined to comment.
Industrial & Commercial Bank of China, the nation’s biggest listed lender and also known as ICBC, added 1.1 percent to 4.54 yuan. Construction Bank, the second largest, rose 1 percent to 5.25 yuan.
ICBC’s first-quarter profit increased 18 percent from a year earlier while net income for Construction Banks climbed 34 percent, according to separate statements last night.
China Pacific Insurance (Group) Co., the nation’s third- largest insurer, gained 3.1 percent to 25.33 yuan. First-quarter net income rose 192 percent on a year earlier to 2.8 billion yuan, said the company.
Baoshan Iron & Steel Co., the biggest steelmaker, advanced 6 percent to 6.89 yuan. First-half profit may surge by between sixfold and 10-fold from a year ago as Chinese demand for the metal used in cars and appliances rebounds, it said. First- quarter profit jumped 44 fold to 3.93 billion yuan.
Shanghai has begun restricting access to its Lujiazui financial district as China’s richest city steps up security before its $44 billion World Expo opens to the public tomorrow. The six-month long expo is scheduled to run through October and attract an estimated 70 million visitors to Shanghai, according to organizers.
The following companies were among the most active in China’s markets. Stock symbols are in brackets after companies’ names.
Fujian Furi Electronics Co. (600203 CH) slumped the maximum 10 percent to 7.79 yuan after the computer maker said it was under investigation by the nation’s securities regulator.
Ningbo Veken Elite Group Co. (600152 CH), a textile manufacture, tumbled 10 percent to 6.79 yuan, a one-month low. The company posted a first-quarter loss of 11.9 million yuan, according to a statement to the stock exchange.
Sichuan Chengfa Aero-Science & Technology Co. (600391 CH) fell by the daily 10 percent cap for a second day to 26.15 yuan, after Southwest Securities cut its stock rating to “neutral” from “add.”
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