China’s stocks fell, sending the benchmark index to a fourth week of losses, after Great Wall Motor Co. delayed sales of a vehicle and small-company shares slumped amid concern new equity sales will divert funds.
Great Wall Motor Co., China’s biggest maker of sport utility vehicles, plunged 10 percent in Shanghai and 17 percent in Hong Kong after it pushed back sales of its new flagship Haval H8 SUV. Goertek Inc., an Apple Inc. supplier, led declines for technology companies. Data today showed the consumer-price index rose 1.8 percent in April, compared with the median estimate of a 2.1 percent gain. The producer-price index slid 2 percent, the 26th straight decline.
The Shanghai Composite Index (SHCOMP) slipped 0.2 percent to 2,011.14 at the close, extending this week’s loss to 0.8 percent. The April inflation data offer a mixed picture as slowing prices signal slumping consumption demand, while giving the government room to implement mini-stimulus, Bank of America Corp. said in a report today.
“The CPI and PPI data are within expectations,” said Dai Ming, a money manager at Hengsheng Hongding Asset Management Co. in Shanghai, which oversees about $193 million. “Investors are giving more attention to new initial public offerings. The market will have small movements unless there’s fresh progress on IPOs.”
The Shanghai Composite has dropped 5 percent this year on concern economic growth is slowing and IPOs will resume. The ChiNext index of small-company stocks slid 1.7 percent today, capping a 19 percent decline from a record high in February.
The total number of companies seeking to go public has climbed to 307 after nine more prospectuses were posted on the website of the China Securities Regulatory Commission yesterday. The regulator hasn’t approved any IPO sales since January as it reforms the process to make offerings more market-oriented.
The CSI 300 Index slipped 0.1 percent to 2,133.91 today, while the Hang Seng China Enterprises Index (HSCEI) fell 0.5 percent. The Bloomberg China-US 55 Index added 0.3 percent yesterday.
Today’s price data add to signs that domestic demand remains muted, with falling commodity prices exacerbating overcapacity in industries including steel and cement.
A measure of industrial companies in the CSI 300 dropped as much as 1 percent to the lowest level since November 2008. Dongfang Electric Corp. slid 1.8 percent.
Great Wall Motor slumped the most since October 2008 in Hong Kong. The company has decided to hold off on sales of the vehicle until it is able to make the H8 of a “premium standard,” it said yesterday, without specifying a date. Customers reported hearing “knocking noises” in the transmission system when driving at high speeds, it said.
Goertek tumbled 4.8 percent. Apple is in advanced talks to acquire headphone maker and music-streaming service Beats Electronics LLC for $3.2 billion, people with knowledge of the matter said.
Poly Real Estate Group Co. (600048), China’s second-largest developer by market value, retreated 1.3 percent after saying contract sales dropped 12 percent from a year earlier in April.
A measure tracking material stocks advanced 0.9 percent, the most among the CSI 300’s 10 industry groups. Jinduicheng Molybdenum Co. jumped 10 percent to the highest close since March 4 while China Molybdenum Co. surged 10 percent.
Agricultural Bank of China Ltd. gained 0.4 percent. Its board approved a plan to sell as many as 800 million preferred shares through private transactions, the lender said in a statement yesterday. The sale is the nation’s biggest for preferred stock offerings since the government allowed companies to issue the securities under a trial program two months ago.
Trading volumes in the Shanghai measure were 23 percent below the 30-day average today, according to data compiled by Bloomberg. The index is valued at 7.5 times 12-month projected earnings, compared with the five-year average multiple of 11.9.