June 24 (Bloomberg) -- Chinese stocks fell for a third day in the U.S., with China Petroleum and Chemical Corp. leading the drop, amid mounting concern that slumping real estate prices will curtail growth in the world’s second-largest economy.
The Bloomberg China-US Equity Index declined 0.9 percent, the most in six weeks, to 103.76 yesterday. China Petroleum, the oil refining company also known as Sinopec, fell 3 percent for the biggest slump in two months. China Life Insurance Co., the nation’s biggest insurer, dropped the most since April. Cell phone service provider China Mobile Ltd. slid to a six-week low.
Stocks fell amid concern a weakening real estate market will test China’s ability to achieve its 7.5 percent target for economic expansion. Home prices fell in 35 of 70 major cities last month from April, data showed last week. Policy makers appear to be tolerant of a gradual decline in prices, a signal that they won’t intervene to stem the decline, according to Qinwei Wang, a London-based economist at Capital Economics.
“Policy makers seem unwilling to use large-scale stimulus to revive economic growth this time,” Wang said by phone yesterday. “People are worried about a hard landing of the economy should investment in real estate continue to drop. It would impact not only property prices but also related manufacturing and consumption.”
JPMorgan Chase & Co. analysts led by Ryan Li wrote in a report yesterday that China’s property market may further deteriorate in the next six to eight weeks on poor sentiment, pushing more developers to cut prices. Concern that falling real estate prices and tighter liquidity in the banking system will squelch growth outweighed data showing an increase in manufacturing.
Sinopec, China Mobile
China’s benchmark money-market rate rose to a seven-week high as new share sales drained funds and banks hoarded cash to meet quarter-end requirements, data from the National Interbank Funding Center showed.
Sinopec fell to $93.79. Cnooc Ltd., China’s largest offshore oil explorer, tumbled 1.9 percent to $177.59, sliding the most this month.
West Texas Intermediate oil for August delivery fell 0.6 percent to $106.17 a barrel while Brent crude futures slipped from the highest level in almost nine months as the widening conflict in Iraq has so far spared the country’s main oil-producing region.
China Mobile, the nation’s biggest wireless network carrier, fell 1.7 percent to $47.96. Its smaller rival China Unicom Hong Kong Ltd. slid 1.2 percent to $15.10, the lowest level in a week.
China Life dropped 2.8 percent to $39.61. Aluminum Corp. of China Ltd., the country’s biggest producer of the metal, slumped 1.6 percent to $9.05.
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., sank 1.2 percent, the most in two months, to $37.36. The Standard & Poor’s 500 was little changed after reaching a record high on June 20.
The Hang Seng China Enterprises Index slid 1.9 percent, the most since April 15, to 10,198.10. The Shanghai Composite Index slipped 0.1 percent to 2,024.37.
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