The Shanghai Composite Index (SHCOMP)’s measure of property shares dropped 1.5 percent as of 10:30 a.m., the largest decline among the five industry groups on the benchmark gauge. The property index is set for the biggest two-day drop since August. China Vanke Co. (000002), the country’s biggest developer by sales, fell 2.2 percent to a two-week low in Shenzhen trading. Poly Real Estate Group Co. (6000048) dropped 1.9 percent to the lowest since Feb. 21.
China must not slacken efforts in regulating the housing sector and relaxing curbs could cause “chaos” in the market, Wen said at a press conference in Beijing yesterday. A burst property bubble would hurt the entire economy, and the government wants “long-term steady and sound growth” in housing, he said.
“Hopes of a quick loosening are dashed,” wrote Alan Jin, a Hong Kong-based analyst at Mizuho Securities Asia Ltd., in a note to clients today. “It is unlikely for the central government to send out a clear loosening signal to the market any time soon.”
Chinese developers traded in Hong Kong made half of the biggest declines on the MSCI China Index. China Resources Land Ltd. (3383), a state-owned developer, fell 2.6 percent to HK$13.40, the lowest in two months. Country Garden Holdings Co. (2007) dropped the most in two weeks, losing 3.6 percent to HK$3.24.
--Bonnie Cao. Editors: Andreea Papuc, Malcolm Scott
To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at firstname.lastname@example.org
To contact the editor responsible for this story: Andreea Papuc at email@example.com