Markets

Equities dip on property, debt concerns

By Zhang Shidong (China Daily)
Updated: 2010-06-30 10:04

Plunge marks lowest close in 14 months for Shanghai index

SHANGHAI - Mainland stocks slumped, driving the benchmark index down the most in six weeks, on concern China's property curbs and Europe's debt crisis will slow growth in the world's third-largest economy.

The Shanghai Composite Index retreated 108.23, or 4.3 percent, to close at 2,427.05, the most since May 17 and the lowest close in 14 months.

Bank of China Ltd dropped among lenders on concern that Agricultural Bank of China Ltd's initial public offering (IPO) may divert investor funds away from existing equities.

Healthcare and technology shares led declines by small-company stocks on valuation concerns.

The CSI 300 Index fell 4.6 percent to 2,592.02 on Tuesday.

The leading economic indicator for China rose 0.3 percent in April, less than the 1.7 percent gain reported on June 15, the Conference Board said.

The previous release contained a "calculation error" for total floor space on which construction began, the research group said in a statement on Tuesday.

Related readings:  Chinese stocks slump 4.27% to 14-month low Tuesday  HK stocks close 2.31% lower -- June 29  Property market sees sold-floor space up last week  Agricultural Bank of China to launch $11.4b IPO  400b yuan raised since restart of IPO

"This correction doesn't affect our outlook for the Chinese economy," William Adams, resident economist for the Conference Board in Beijing, said.

"Growth was not likely to accelerate in China and, in fact, moderation is possible. This correction also supports the same view."

China's annual growth will slow to 9.3 percent next year from 10.1 percent this year, according to the median forecasts in Bloomberg News surveys of economists.

Concerns over the prospect for growth sent both copper and nickel prices down by more than 3 percent. Crude oil declined 1.9 percent to $76.74 a barrel.