China’s Stock-Index Futures Drop on Fed, Emerging-Market Concern

China’s stock-index futures fell, with the benchmark gauge heading for its worst start to a year since 2010, as emerging stocks dropped after the U.S. Federal Reserve pressed on with cuts to stimulus.

Shares of Industrial & Commercial Bank of China Ltd., the nation’s biggest listed lender, may be active after the company agreed to buy a stake in a unit of Standard Bank Group Ltd. Bullion producer Zhongjin Gold Co. (600489) may move after saying profit probably dropped about 60 percent last year.

Futures on the CSI 300 Index expiring in February lost 0.2 percent to 2,234.4 at 9:17 a.m. local time.

The Shanghai Composite Index (SHCOMP) climbed 0.6 percent to 2,049.91 yesterday. The gauge has lost 3.1 percent this month, heading for the biggest January drop in four years. China’s markets will be shut from tomorrow through Feb. 6 for the lunar New Year holidays.

The CSI 300 Index (SHSZ300) rose 0.4 percent to 2,227.78 yesterday. The Hang Seng China Enterprises Index (HSCEI) gained 1.4 percent. The Bloomberg China-US Equity Index, the measure of the most-traded U.S.-listed Chinese companies, fell 1.9 percent in New York.

HSBC Holdings Plc and Markit Economics are due to release the January manufacturing Purchasing Managers’ Index at 9:45 a.m. local time today. The preliminary reading was 49.6, according to data released last week, signaling the first contraction in six months. A number above 50 indicates expansion. Official PMI data from the nation’s statistics bureau is due on Feb. 1.

Emerging Stocks Drop

The iShares MSCI Emerging Markets Index exchange-traded fund declined to a five-month low after the Federal Reserve pressed on with a reduction in economic stimulus amid a selloff in developing-nation currencies.

The Fed said yesterday it will trim its monthly bond-buying by $10 billion to $65 billion, sticking to its plan for a gradual withdrawal of stimulus from departing Chairman Ben S. Bernanke’s unprecedented easing policy.

The Shanghai index trades at 7.7 times 12-month projected earnings, compared with the five-year average multiple of 12.3, according to data compiled by Bloomberg. Trading volumes in the index were 4.7 percent below the 30-day average yesterday, according to data compiled by Bloomberg.

ICBC agreed to pay about $765 million for 60 percent of Johannesburg-based Standard Bank’s markets unit to expand in commodities and currency trading.

Chinese equities fell in New York yesterday as Sina Corp. plunged to a six-month low after a rout in emerging-market currencies highlighted weakness in the global economy.

Equities fell in the U.S. and Europe after increases in interest rates by central banks from Turkey to South Africa failed to prop up currencies in developing nations, sparking concern that inflation will accelerate.

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

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.