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China Stocks Drop 10% From February High as Data Miss Estimates

Photographer: Peter Parks/AFP/Getty Images

An investor looks at stock prices on a screen at a securities exchange in Shanghai. Close

An investor looks at stock prices on a screen at a securities exchange in Shanghai.

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Photographer: Peter Parks/AFP/Getty Images

An investor looks at stock prices on a screen at a securities exchange in Shanghai.

China’s stocks fell, dragging the Shanghai Composite (SHCOMP) Index down by 10 percent from its February high, as data on the nation’s economic growth and industrial production missed estimates.

Construction machinery maker Zoomlion Heavy Industry Science and Technology Co. slumped to a 15-month low after forecasting lower profit. Cosco Shipping Co. (600428), a unit of China’s biggest shipping company, lost 3.9 percent after reporting a loss. Zijin Mining Group Co. sank 5.6 percent, leading gold producers lower, after the metal’s futures dropped by the 5 percent daily exchange limit in Shanghai.

The Shanghai Composite fell 1.1 percent to 2,181.94 at the close, its lowest level since Dec. 24. The economy grew 7.7 in the first quarter from a year earlier, the National Bureau of Statistics said today, less than the 8 percent median forecast in a survey of 41 economists. Industrial production rose 8.9 percent in March, the report showed. That compared with the 10.1 percent median economist forecast.

“These figures are pretty bad,” said Dai Ming, a fund manager at Hengsheng Hongding Asset Management Co. in Shanghai, which manages $190 million. “The current stock prices haven’t fully reflected lower-than-expected economic data and the market has room for further declines.”

The CSI 300 Index retreated 1 percent to 2,436.82. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong slid 1.8 percent. The Bloomberg China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, fell 0.5 percent in New York yesterday.

Economic Data

The Shanghai index has fallen 10 percent from a Feb. 6 high amid concern steps to cool property prices will drag on economic growth. Valuations on the gauge dropped to 8.9 times projected 12-month earnings on April 12, the lowest level since Dec. 13 and less than the seven-year average of 15.8, data compiled by Bloomberg show.

Fixed-asset investment excluding rural households grew 20.9 percent in the January-to-March period from a year earlier, the statistics bureau reported. That compared with the 21.3 percent median estimate in a Bloomberg survey and a 21.2 percent gain in the first two months of 2013. Retail sales in March rose 12.6 percent from a year earlier, meeting estimates.

Premier Li Keqiang said the nation should pay attention to the quality and efficiency of development as it seeks to guarantee “reasonable” economic growth, China National Radio reported yesterday.

Zoomlion, China’s second-biggest maker of construction equipment, slumped 5.5 percent to 7.63 yuan after estimating first-quarter profit will fall between 60 percent and 80 percent. The stock closed at the lowest level since Jan. 6, 2012.

Gold Tumbles

Cosco Shipping fell 3.9 percent to 3.49 yuan, the lowest close since Dec. 6. The company reported a first-quarter loss of 45.1 million yuan, ($7.29 million), compared with a profit of 3.8 million yuan a year earlier.

Zijin Mining, China’s largest gold producer, dropped 5.6 percent to 3.20 yuan. Zhongjin Gold Co. (600489), the third biggest, slumped 6.7 percent to 12.93 yuan. Bullion for June delivery on the Shanghai Futures Exchange slumped by the 5 percent daily exchange limit. Spot gold fell 6.2 percent to $1,483 an ounce last week, the biggest drop since December 2011.

Trading volumes in the Shanghai composite were 30 percent lower than the 30-day today, according to data compiled by Bloomberg. Ten-day volatility on the gauge was at 7.9, near the lowest level since January 2008, the data showed.

The iShares FTSE China 25 Index Fund, the largest Chinese exchange-traded fund in the U.S., fell 0.7 percent to $36 on April 12, rising 1 percent for the week.

Suntech Power Holdings Co. (STP), whose main unit was forced into bankruptcy after defaulting on a $541 million bond repayment last month, jumped 80 percent to 75 cents, the steepest weekly advance on record. While the solar-cell maker had the biggest gain on the Bloomberg China-US gauge for the week, it is still down 60 percent from this year’s high reached Jan. 16.

To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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