China’s Stocks Drop Most in Month on Economy, Deflation Concern

China’s stocks fell by the most in a month, after a drop in producer prices fueled concern deflation may spread to other parts of the economy and Premier Wen Jiabao said the economy faces “relatively large” downward pressure.

PetroChina Co., the biggest energy producer, dropped 2.7 percent to a record low before a report later this week that may show economic growth slowed to 7.7 percent in the second quarter. Angang Steel Co. paced declines for steelmakers after saying it expects to swing to a loss in the first half. Data today showed consumer prices rose 2.2 percent in June from a year earlier, compared with the 2.3 percent median estimate in a Bloomberg survey, while producer prices slid 2.1 percent.