China’s stocks fell for a second day as losses for consumer-staple producers and coal companies overshadowed gains for property developers.
Yanzhou Coal Mining Co. slumped the most in three weeks, halting a four-day, 30 percent rally. Kweichow Moutai Co. led declines for liquor makers. China Vanke Co. and Poly Real Estate Group Co., the biggest developers, climbed at least 1.3 percent after the central bank asked major lenders to accelerate the granting of mortgages. Anhui Conch Cement Co., the largest building-material producer, rose 1.9 percent in Hong Kong.
The Shanghai Composite Index slipped 0.1 percent to 2,047.91 at the close, while the Hang Seng China Enterprises Index advanced 1.4 percent in Hong Kong at 3:11 p.m. The Hang Seng China AH Premium index slid to a three-week low. The central bank’s request to improve lending efficiency comes as an economic slump worsens, with unexpected decelerations in industrial output and investment growth.
“It’s a sign of easing in the property sector and we need to see more follow-up measures such as the loosening of purchase restrictions to fuel a broad-based rally for stocks,” said Wu Kan, a fund manager at Shanghai-based Dragon Life, which oversees about $3.3 billion. The Hang Seng China index extended gains in midday trading on speculation of a cut in Chinese lenders’ reserve-requirement ratios, he said.
“It may not come immediately, but probably next month,” Wu said. Nomura Holdings Inc. said the central bank’s order to lenders isn’t enough to turn around the property market and more loosening measures may be announced such as a reduction in reserve-requirement ratios in the second quarter.
The People’s Bank of China told 15 lenders yesterday to “improve efficiency of service, give timely approval and distribution of mortgages to qualified buyers,” according to a statement posted on its website. It also urged lenders to give priority to families buying their first homes and to strengthen their monitoring of credit risks.
China Vanke gained 1.3 percent, while Poly Real Estate surged 1.6 percent. Anhui Conch climbed to its highest level since May 2 in Hong Kong trading.
A gauge of consumer-staples producers in the CSI 300 dropped 1.2 percent, the most among 10 industry groups. Kweichow Moutai, the bigger producer of baijiu liquor, slumped 3.4 percent, the biggest loss since April 25. Yanzhou Coal slid 2.1 percent, while Pingdingshan Tianan Coal Mining Co. extended declined to a second day after rallying 10 percent on May 12.