Vipshop Tumbles as No Easing Signaled: China Overnight
Chinese equities fell for the first time in three days in New York, led by Vipshop Holdings Ltd. (VIPS), as the government signaled no plans to ease monetary policy.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. slipped 1.1 percent to 87.56 as of 12:03 p.m. Vipshop, a Guangzhou-based online fashion retailer, sank the most in three weeks, and Suntech Power Holdings Co. (STP) slid 5.7 percent in its first decline in four days. China Unicom (Hong Kong) Ltd. fell the most this month after data showed subscriber additions slowed in May.
China will study measures to support its economic restructuring and maintain a prudent monetary policy while keeping money supply at a “reasonable” level, the cabinet said in a statement yesterday. A gauge of interbank funding availability in China surged to the highest level in two years as the central bank refrained from adding funds to ease a cash squeeze. The Federal Open Market Committee plans to release a statement after a two-day meeting in Washington.
China’s statement signals “the slowdown isn’t worrisome enough for policy makers to take any action at the moment,” Michael Wang, an emerging-markets strategist at Amiya Capital LLP in London, said by e-mail. “It raises the risk of much slower growth.”
China’s economic growth slowed to 7.7 percent in the first quarter, from 7.9 percent in the prior period.
The iShares FTSE China 25 Index Fund (FXI), the largest Chinese exchange-traded fund in the U.S., tumbled 1 percent to $34.23 after rising the previous two days. The Standard & Poor’s 500 Index slipped 0.1 percent to 1,649.88, its first decline this week, before a Federal Reserve meeting that may clarify the outlook for U.S. monetary stimulus.
The Hang Seng China Enterprises Index in Hong Kong dropped 1.5 percent to 9,584.54, retreating for a second day this week. The Shanghai Composite Index (SHCOMP) slumped 0.7 percent to 2,143.45, extending its slump to 6.8 percent this month.
To contact the reporter on this story: Belinda Cao in New York at email@example.com