Most Chinese stocks fell as concerns about the outlook for earnings and property prices overshadowed gains for consumer companies.
China Vanke Co., the nation’s biggest developer, slid to the lowest in a month after Beijing News cited a housing ministry official as saying property prices won’t rebound this year. Yanzhou Coal Mining Co., China’s fourth-biggest coal miner, fell 1 percent after net income dropped. Kweichow Moutai Co. rose for a third day as a UBS AG unit said it favored consumer staples producers. Jiangxi Copper Co., the largest copper producer, added 1.2 percent on higher metal prices.
“First-quarter economic growth and earnings will be poor and the market will be disappointed,” said Li Jun, a strategist at Central China Securities Co. in Shanghai. “On the other hand, we’ll see more pro-growth policies. That may offset some of the downside risk of the market.”
About four stocks fell for every three that advanced on the Shanghai Composite Index, which rose 1.06 point, or 0.1 percent, to 2,350.60 at the close. The CSI 300 Index added 0.1 percent to 2,555.44. The Bloomberg China-US 55 Index, the measure of the most-traded U.S.-listed Chinese companies, added 0.7 percent in New York on March 23.
Thirty-day volatility in the Shanghai Composite was at 15.27 today, near a five-day high. About 7.7 billion shares changed hands in the gauge on March 23, or 14 percent lower than the daily average this year. Stocks in the measure trade at 9.8 times estimated profit, compared with a record low of 8.9 times on Jan. 6, weekly data compiled by Bloomberg showed.
The Shanghai Composite fell 2.3 percent last week, the steepest weekly drop since the period ended Dec. 16, after reports showed profits for state-owned companies dropped in the first two months of this year and manufacturing may contract in March. It has advanced 6.9 percent this year on speculation the government will take measures to boost economic growth.
Vanke fell 1.2 percent to 8.02 yuan. Poly Real Estate Group Co., the second-largest developer, dropped 0.8 percent to 10.52 yuan. China Merchants Property Development Co. retreated 2.3 percent to 19.34 yuan.
China’s property prices won’t rebound this year as central and local governments persist with policies to curb investment and speculation, Beijing News reported yesterday, citing Qin Hong, director of policy research at the Ministry of Housing and Urban-Rural Development.
There are also unsold properties, which will prevent prices from rising, the paper said, citing Qin. The government will “certainly” expand property taxes from the current trial programs as a long-term measure to curb speculation, Qin was cited as saying.
New home prices fell in 27 of 70 Chinese cities last month from a year earlier, while prices were unchanged in six others, China’s statistics bureau said on March 18. That was the worst performance since the government started releasing individual data for 70 cities at the start of 2011.
Yanzhou Coal retreated 1 percent to 24.50 yuan. Net income dropped 3.8 percent from a year earlier to 8.9 billion yuan ($1.41 billion) in 2011, Yanzhou Coal said in a statement on March 23 after the market closed. The stock was downgraded to sell from hold by Lawrence Lau, an analyst at Bank of China Ltd.
Three hundred and seventy-five companies in the Shanghai Composite have released annual earnings. They posted profit growth of 19 percent on average, trailing analyst estimates by 3.8 percent, Bloomberg data showed. That compared with an increase of 38 percent in the previous year.
Measures of consumer staples and discretionary stocks in the CSI 300 advanced 1.4 percent and 0.5 percent respectively today, the biggest gainers among the 10 industry groups.
Kweichow Moutai rose 1.5 percent to 215.20 yuan, the highest close since Aug. 29. Jiangsu Yanghe Brewery Joint-Stock Co. advanced 3.3 percent to 162.39 yuan.
“We like consumer staples which will benefit from wage increases,” Pu Yonghao, Hong Kong-based chief investment strategist at UBS Wealth Management, said on Bloomberg Television today. This year’s stocks rally is not over, and emerging-market equities may rise again in the second half, he said.
Jiangxi Copper, China’s biggest producer of the metal, gained 1.2 percent to 25.86 yuan. Tongling Nonferrous Metals Group Co., the second biggest, added 1.5 percent to 20.72 yuan.
Copper climbed for a second day on speculation that demand from China and the U.S. remains robust. Three-month copper rose as much as 0.4 percent to $8,414 a metric ton on the London Metal Exchange.