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China’s Stocks Fall to Five-Month Low on Economic Growth Concern

Photographer: Tomohiro Ohsumi/Bloomberg

Customers watch share prices on an electronic stock board at a security firm in Shanghai. Close

Customers watch share prices on an electronic stock board at a security firm in Shanghai.

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Photographer: Tomohiro Ohsumi/Bloomberg

Customers watch share prices on an electronic stock board at a security firm in Shanghai.

China’s stocks declined, dragging down the benchmark index to its lowest level in five months, amid concern economic growth is slowing.

China Railway Group Ltd. (601390) plunged the most in more than two months after the company said its president died in an accident. CSR Corp., the nation’s biggest train maker, fell 2.9 percent. China Shenhua Energy Co. dropped 3 percent after BNP Paribas SA said coal prices may decrease. Gree Electric Appliances Inc. dropped 3.1 percent.

The Shanghai Composite Index (SHCOMP) slid 1.9 percent to 2,043.01 at the 11:30 a.m. local-time break, poised for the lowest close since Aug. 2. Gauges of manufacturing and services industries fell in December amid higher money-market rates. The securities regulator approved 11 initial public offerings for Shenzhen over the weekend, spurring concern investors will sell existing shares to subscribe to IPOs.

“Economic growth is losing steam,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai. “Liquidity remains a challenge.”

A services-industry gauge decreased to 50.9 in December from 52.5 the previous month, according to HSBC Holdings Plc and Markit Economics Ltd. today. An official report last week showed a non-manufacturing gauge fell to a four-month in December, after two measures of factory output slid.

Photographer: Jerome Favre/Bloomberg

The logo of China Railway Group Ltd. is displayed at a news conference in Hong Kong. China Railway Group fell 3.4 percent to 2.53 yuan. Close

The logo of China Railway Group Ltd. is displayed at a news conference in Hong Kong.... Read More

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Photographer: Jerome Favre/Bloomberg

The logo of China Railway Group Ltd. is displayed at a news conference in Hong Kong. China Railway Group fell 3.4 percent to 2.53 yuan.

The CSI 300 Index lost 2.3 percent to 2,237.37. The Hang Seng China Enterprises Index (HSCEI) sank 1.5 percent.

Accidental Death

A gauge tracking industrial companies slumped 3.1 percent, the most among the CSI 300’s 10 groups. China Railway Group fell 4.6 percent to 2.50 yuan. The company’s operations remain normal and the chairman will assume the president’s responsibilities before a new appointment, according to a company statement, which didn’t disclose details of the accident.

Other rail companies declined. CSR fell 2.9 percent to 4.78 yuan. Guangshen Railway Co. slid 5.6 percent to 2.51 yuan.

The Shanghai gauge retreated 6.75 percent last year amid concern slowing economic growth will curb profits, and is valued at 7.7 times projected 12-month earnings, the lowest level in at least five years, according to data compiled by Bloomberg.

The Chinese economy may have expanded 7.6 percent in 2013, the weakest pace in 14 years, according to the State Council.

The government will release foreign trade and inflation data for December this week. Export growth probably slowed to 5.2 percent from 12.7 percent a month earlier, while inflation probably eased to 2.7 percent from 3 percent, according to Bloomberg surveys of economists.

Coal Prices

Shenhua, the nation’s largest coal producer, dropped 3 percent to 14.91 yuan. China Coal Energy Co. (601898), the second biggest, fell 2.8 percent to 4.54 yuan.

Spot coal prices may extend declines in the near term amid stable inventory at Qinhuangdao Port and rising production in Shanxi province, analysts led by Daisy Zhang wrote in a report last Friday.

Consumer discretionary companies retreated 2.5 percent, led by appliance-related stocks. Gree Electric dropped 3.1 percent to 30.04 yuan. Suning Commerce Group Co., China’s largest electronics retailer, slid 4 percent to 9 yuan.

Qunar Cayman Islands Ltd. (QUNR), the Chinese travel-booking website controlled by Baidu Inc., surged 11 percent in New York on Jan. 3 after reporting an increase in travel reservations on mobile devices. Ctrip.com International Ltd. (CTRP), China’s biggest online travel agency, plunged 7.9 percent. The Bloomberg China-US Equity Index fell 1.5 percent.

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

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

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