China’s stocks fell to the lowest level in three weeks after the government ordered curbs on real- estate speculation through measures such as expanding a property tax and setting home-price control targets.
Anhui Conch Cement Co., the nation’s biggest producer of the building material, slumped 3.4 percent. China Construction Bank Corp. (939), the largest mortgage lender, slid to the lowest in a month. Jiangxi Copper Co. and PetroChina Co. led declines for metal and energy stocks after minutes from the Federal Reserve’s last meeting showed debate over further stimulus action.
The Shanghai Composite Index (SHCOMP) retreated 1.5 percent to 2,362.24 at 9:56 a.m. local time, heading for the lowest level since Jan. 29. The CSI 300 Index (SHSZ300) dropped 1.7 percent to 2,656.48, with seven out of 10 groups down by at least 1 percent. The Standard & Poor’s 500 Index slid 1.2 percent yesterday after minutes of the Fed meeting showed policy makers were divided about bond purchases known as quantitative easing.
“Stocks are down after U.S. stocks plunged overnight and as investors are concerned on the latest statement on property measures,” Huang Cendong, an analyst at Tebon Securities Co., said in Shanghai by phone today.
The Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong slumped 1.6 percent. The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese companies in the U.S. slipped 1.1 percent yesterday.
The Shanghai index had risen 22 percent from a three-year low on Dec. 3 through yesterday on signs economic growth is accelerating. The benchmark index’s valuation of 9.98 times projected 12-month earnings was the lowest in three weeks. Trading volumes were 12 percent above the 30-day average today.
Chinese cities that have had “excessively fast” price gains should promptly impose home-purchase restrictions if they’ve not done so already, according to a statement released yesterday after a State Council meeting headed by Premier Wen Jiabao. Provincial capitals and municipalities reporting directly to the central government should also publish annual price-control targets to keep new-home costs “basically stable,” according to the statement. Wen also said China will expand property-tax trials, Xinhua said.
A gauge of Chinese developers in the Shanghai index fell 0,5 percent today as the government seeks to cool the real estate market after prices rebounded. Home prices rose 1 percent last month from December, the most since January 2011, according to data from SouFun Holdings Ltd. (SFUN), the nation’s biggest property website.
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