Chinese stocks in New York fell to a one-week low, led by mobile phone companies, after an industry report showed sustained weakness in factory output.
The Bloomberg index of the most-traded Chinese stocks in the U.S. dropped 1.7 percent to 99.42 at yesterday. China Mobile Ltd., the world’s largest phone company, retreated to a four-week low after posting its third straight decline in quarterly profit on April 22. China Unicom Ltd., the nation’s second-biggest carrier, slumped the most since October. Sina Corp., owner of a Twitter-like service, fell for a third day.
The 48.3 preliminary April reading for the Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was below the expansion-contraction dividing line of 50 and added to data last week that showed China’s expansion has moderated to the slowest pace in six quarters. While the State Council outlined plans earlier this month for railway spending and tax breaks, Premier Li Keqiang has said that the government isn’t considering stronger stimulus policies.
“It’s not clear exactly what stimulus path the government is going to take,” Paul Zemsky, who helps oversee about $200 billion as executive vice president of ING Investment Management Co. in New York, said by phone. Any stimulus measure will be “very deliberate, relatively slow in coming as the authorities watch and see what happens to the economy as it tries to transition.”
China is trying to balance supporting growth with curbing shadow banking, eliminating overcapacity and reducing pollution. The nation’s gross domestic product rose 7.4 percent in the January-to-March period from a year earlier, the statistics bureau said April 16 in Beijing. The economy is forecast to expand 7.4 percent this year, according to a Bloomberg survey of analysts last month, which would be the slowest pace since 1990. Growth was 7.7 percent in 2012 and 2013.
The government said in an April 2 statement that it will sell 150 billion yuan ($24 billion) of bonds this year to help build railways, mainly in the less-developed central and western regions. China also announced it would extend a preferential tax policy to more small companies and increase financing to build low-income housing.
China Mobile declined for a third day, dropping 2.7 percent to $45.09 after reporting expenses for subsidizing Apple Inc.’s iPhone and building networks increased. Net income slid 9.4 percent to about 25.24 billion yuan ($4 billion) in the first quarter, the Beijing-based company said April 22, missing the median analyst estimate of 27 billion yuan. China Unicom plummeted 4.3 percent to $12.89.
Sina, whose microblogging unit Weibo Corp. debuted in New York last week, dropped the most in two weeks, falling 4.6 percent to $53.27.
Vipshop Holdings Ltd., an online fashion retailer, gained the most in the Bloomberg index, rising to its highest price since April 1. The Guangzhou-based company increased 1.8 percent to $156.35, extending its 2014 surge to 87 percent.
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., fell for a third day, sinking 1.4 percent to $34.93. The Standard & Poor’s 500 Index slipped 0.2 percent as reports showed weakness in U.S. new home sales and manufacturing.
The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong dropped 1.3 percent to 9,905.63. The Shanghai Composite Index decreased 0.3 percent to 2,067.38.