China Stocks Fall After Services Data as Property Concern Widens

China’s stocks fell, dragging the benchmark index to its lowest level this month, as consumer companies and property developers sank after a private services index declined and concern mounted that home sales are slowing. [bn:WBTKR=002594:CH]

BYD Co. [], the automaker partly owned by Warren Buffett’s Berkshire Hathaway Inc., tumbled 5.6 percent. China State Construction Engineering Corp. paced losses by property companies after the central bank said it will toughen monitoring of the real-estate industry. Tencent (700) Holdings Ltd. sank to its lowest close since December in Hong Kong following a rout in Internet stocks in the U.S.

“The economy is still on a downward trend and the market is cautious,” said Wei Wei, an analyst at West China Securities Co. in Shanghai.

The Shanghai Composite Index (SHCOMP) slid 0.9 percent to 2,010.08 at the close. A services index from HSBC Holdings Plc and Markit Economics dropped to 51.4 in April from 51.9 in the previous month. A gauge of property stocks fell for a sixth day as the China Securities Journal said some small and medium-sized property developers are facing liquidity problems.

The CSI 300 Index lost 0.9 percent to 2,137.32. The Hang Seng China Enterprises Index fell 0.9 percent to its lowest level since March 21.

The Bloomberg China-US 55 Index retreated 0.5 percent in New York yesterday, when Alibaba Group Holding Ltd. filed for what could become the largest U.S. initial public offering ever. Alibaba, founded by former English teacher Jack Ma, filed for its U.S. IPO after the close of trading in New York. The online marketplace might raise as much as $20 billion, topping a $19.65 billion offering by Visa Inc. in 2008, data compiled by Bloomberg show.

Growth Concerns

The Shanghai Composite has slumped 5 percent this year and the Hang Seng China gauge has retreated 11 percent on concern slowing economic growth will dent earnings. Almost all provinces failed to meet their growth targets in the first quarter even after scaling back their ambitions as the government instructs officials to focus on reining in debt and curbing pollution.

A measure tracking consumer discretionary shares fell 1.7 percent on the CSI 300. BYD had its biggest loss since March 20. Suning Commerce Group Co., an operator of retail chain stores, slid 4.2 percent.

China State Construction lost 1.3 percent. In Hong Kong, Country Garden Holdings Co. tumbled 4.9 percent, Evergrande Real Estate Group Ltd. (3333) dropped 3.6 percent and Shimao Property Holdings Ltd. (813) sank 6 percent after Deutsche Bank AG cut the three developers to sell from buy.

Property Sales

Land sales in 20 major cities fell 5 percent in March from a year earlier, the biggest drop in at least a year, according to China Real Estate Information Corp. data compiled by Bloomberg. The value of land sales in third-tier cities declined 27 percent last month, according to SouFun Holdings Ltd., the nation’s biggest real-estate website owner.

Tencent slumped 3.8 percent. Yonyou Software Co. lost 3.6 percent. The Nasdaq Composite Index slumped 1.4 percent in the U.S., with Twitter Inc. leading the selloff.

The ChiNext index of small-cap companies dropped 2 percent, taking its loss from a record high in February to 17 percent.

Mindray Medical International Ltd. (MR), a medical device maker, slid yesterday in U.S. trading after reporting first-quarter revenue that trailed analyst estimates. Y Inc., owner of an entertainment website, sank the most in six months on concern its growing music business may dilute profit margins.

Ten of the 13 U.S.-listed Chinese companies that have released first-quarter earnings reported revenue that trailed analyst estimates, data compiled by Bloomberg show.

The Shanghai Composite is valued at 7.4 times 12-month projected earnings, compared with the five-year average multiple of about 12. Trading volumes in the index were 28 percent below the 30-day average today.

To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net

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

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