Top Biz News

Equities slump led by commodities, realtors

(China Daily/Agencies)
Updated: 2010-01-27 08:02

Mainland equities fell yesterday, dragging the benchmark index to a three-month low, as developers and commodity producers dropped on concern the government will step up measures to slow the world's fastest-growing economy.

Poly Real Estate Group Co slid 4.8 percent and Gemdale Corp slumped 6.2 percent after banks began restricting new loans. Baoshan Iron & Steel fell 3 percent on concern a slowdown will damp demand for metals and other commodities.

The Shanghai Composite Index fell 75.02, or 2.42 percent, to 3,019.39 at the close, the lowest close since Oct 30. The MSCI China Index, which tracks 118 mostly Hong Kong-traded mainland companies, joined the Shanghai index in falling more than 10 percent from last year's high.

"Investors have begun to revaluate their previous projections for earnings growth as the government's tightening has come faster than expected," said Zhang Xiuqi, a Shanghai-based strategist at China International Fund Management Co. "The correction is likely to carry on."

Poly Real Estate slid 4.8 percent to 18.97 yuan ($2.78), the lowest close since April 29. Gemdale dropped 6.2 percent to 11.60 yuan. China Vanke Co dropped 3.2 percent to 9.22 yuan. China State Construction Engineering Corp slumped 3.2 percent to 4.27 yuan.

The Shanghai Composite Index has slumped 7.9 percent this year, led by real estate stocks, as the government reins in credit growth to avert bubbles in the property market.

Commodity producers dropped on concern raw material demand would decline as the economy slows. Baoshan Iron & Steel Co lost 3 percent to 7.46 yuan. PetroChina Co retreated 1.8 percent to 13.15 yuan. Jiangxi Copper Co declined 2.6 percent to 35.66 yuan.

Hang Seng falls

Hong Kong's Hang Seng Index dropped for a fifth day, extending the gauge's slump from its November high to 12 percent, as banks and developers fell on signs the central government is acting to further restrain lending.

Bank of China Ltd and Industrial & Commercial Bank of China Ltd both declined 3.4 percent. Shimao Property Holdings Ltd dropped 3.2 percent.

The Hang Seng Index sank 2.38 percent to 20,109.33 at the close in Hong Kong, its lowest close since Sept 3. The Hang Seng China Enterprises Index slumped 3.8 percent to 11,410.12.