China’s stocks fell for the first time in four days, led by property and energy companies, before tomorrow’s release of a preliminary manufacturing report.
China Vanke Co. and Poly Real Estate Group Co., the biggest developers, lost at least 1.1 percent. Yanzhou Coal Mining Co. declined 1 percent. Sinopec Shanghai Petrochemical Co. fell 3.6 percent. Ping An Insurance (Group) Co. slid 1.1 percent after reporting earnings.
The Shanghai Composite Index (SHCOMP) slipped from an eight-month high, losing 0.2 percent to 2,240.21 at the close. HSBC Holdings Plc and Markit Economics’ preliminary manufacturing index, known as the flash PMI, probably slipped to 51.5 in August from the final reading of 51.7 a month earlier, according to the median estimate of Bloomberg surveys.
“Investors are waiting for tomorrow’s HSBC PMI as the data will show the progress of the country’s recovery,” Zhang Yanbing, an analyst at Zheshang Securities Co., said in Shanghai. “The stock market has risen a fair bit recently and is correcting now, especially because the heavyweights in the index had gained too much earlier and investors are taking a break. Without the support of financials, it’s tough for the rally to have legs.”
The CSI 300 Index fell 0.4 percent, while the Hang Seng China Enterprises Index (HSCEI), or H-shares gauge, decreased 0.5 percent at 3:43 p.m. The Bloomberg China-US Equity Index rose less than 0.1 percent yesterday. Trading volumes in the Shanghai index were 11 percent above the 30-day average.
The Shanghai index has risen 13 percent from this year’s low on monetary easing, faster government spending and speculation a link between the exchanges in Hong Kong and Shanghai will fuel inflows. The gauge is valued at 8.2 times 12-month projected earnings, compared with a multiple of 7.3 for the H-shares index, according to data compiled by Bloomberg.
Concerns about the strength of the economic recovery have grown after data last week showed the weakest credit growth since 2008 and an unexpected slowdown in industrial output. Bank of China Ltd., the nation’s fourth-largest bank, more than doubled its money set aside for bad loans as profit growth cooled to the slowest pace in five quarters.
A measure tracking energy stocks in the CSI 300 dropped 0.9 percent, the most among 10 industry groups. Yanzhou Coal fell 1 percent. Sinopec Shanghai slid 3.6 percent. Ping An, China’s second-biggest insurer, lost 1.1 percent. The company’s first-half profit increased 19 percent from a year earlier.
Vanke lost 2 percent. Poly Real Estate fell 1.1 percent.
The largest Chinese cities of Beijing, Shanghai, Shenzhen and Guangzhou are expected to maintain their home-purchase limits in the short term even after most “lower-tier” cities recently relaxed property curbs, according to four of five analysts interviewed by Bloomberg News last week.
JPMorgan Chase & Co. analyst Ryan Li said first-tier cities may retain home purchase restrictions, while easing implementation of some limits, while Citigroup Inc. analyst Oscar Choi said most cities other than the biggest ones may gradually remove restrictions this year.
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