China’s stocks fell, with the benchmark gauge capping its worst start to a year since 2010, after the nation’s manufacturing contracted for the first time in six months and the U.S. Federal Reserve cut stimulus.
Sinovel Wind Group Co., the country’s biggest maker of wind turbines, retreated to a record low after estimating a wider loss for 2013. Tongling Nonferrous Metals Group Co. declined 1.4 percent after the longest slump in copper futures in 15 months. Industrial & Commercial Bank of China Ltd., the nation’s biggest listed lender, fell 0.9 percent after agreeing to buy a controlling stake in a unit of Standard Bank Group Ltd.
The Shanghai Composite Index slid 0.8 percent to 2,033.08 at the close. A Purchasing Managers’ Index fell to 49.5 from 50.5 in December, HSBC Holdings Plc and Markit Economics said in a statement today. A number below 50 indicates contraction. The MSCI Emerging Markets Index dropped 0.3 percent, heading for its biggest January decline since 2008, after the Fed said it will trim monthly bond purchases.
“The sour sentiment from emerging markets has spilled over into the local market,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “Slowing domestic growth will also be a major concern for the market.”
China’s markets will be shut from tomorrow through Feb. 6 for lunar New Year holidays.
The Shanghai gauge lost 3.9 percent this month, capping the biggest January drop in four years, as signs of slowing growth added to concerns a resumption of initial public offerings after a moratorium of more than one year would flood the market with new shares.
The CSI 300 Index dropped 1.1 percent to 2,202.45. The Hang Seng China Enterprises Index fell 0.8 percent in a shortened trading session. The Bloomberg China-US Equity Index, the measure of the most-traded U.S.-listed Chinese companies, fell 1.9 percent in New York yesterday.
Today’s HSBC PMI trailed the median 49.6 estimate in a Bloomberg survey of 14 economists. Official PMI data from the nation’s statistics bureau is due Feb. 1. The measure fell to 50.5 from 51 a month earlier, according to a Bloomberg survey.
Fed policy makers said yesterday they will reduce monthly bond purchases by $10 billion to $65 billion. The U.S. central bank is sticking to its plan for a gradual withdrawal of stimulus from departing Chairman Ben S. Bernanke’s unprecedented easing policy even after a sell-off in developing-nation currencies.
The Shanghai index is valued at 7.6 times projected 12-month earnings, compared with the five-year average multiple of 12.3, according to data compiled by Bloomberg. Trading volumes in the gauge were 17 percent below the 30-day average today.
Sinovel Wind tumbled 6.3 percent to 3.41 yuan, the lowest close since its listing in January 2011. Its loss for 2013 may be about 3 billion yuan ($495.3 million), partly because of delayed payment by clients, the company said in a statement.
Tongling Nonferrous Metals, China’s second-biggest copper producer, declined 1.4 percent. Jiangxi Copper Co., the nation’s largest, slipped 1 percent.
Copper futures for March delivery fell 0.4 percent to settle at $3.2405 a pound in New York yesterday. The metal dropped for a sixth straight session, the longest losing streak since October 2012, on speculation that rising borrowing costs in emerging markets will damp economic growth.
ICBC dropped 0.9 percent to 3.41 yuan. The lender agreed to pay about $765 million for 60 percent of Johannesburg-based Standard Bank’s markets unit in London to expand its commodities and currency trading.