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Mainland stocks fall on cooling talk
(China Daily)
Updated: 2010-02-02 08:06
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SHANGHAI: Mainland stocks fell, sending the benchmark index to the lowest level in almost four months, as growth in manufacturing heightened concerns the government will take additional measures to prevent the economy from overheating.
Hebei Iron & Steel Co, the listed unit of China's second-biggest steelmaker, declined 3.8 percent after the central bank deputy governor said the government plans to curb overcapacity in industries including steel. Jiangxi Copper Co and Aluminum Corp of China Ltd slid more than 3 percent.
China Shenhua Energy Co paced declines among coal producers after spot prices for the fuel dropped at Qinhuangdao port and earnings slumped.
"The economic data are still quite strong, so the market is over-interpreting the data," said Chen Shide, a Guangzhou-based fund manager at GF Fund Management Co. "As long as good data comes in, that'll evoke more concerns and speculation about further government tightening."
The Shanghai Composite Index dropped 47.93, or 1.6 percent, to 2,941.36 at the close, the lowest since Oct 13. The CSI 300 Index declined 1.6 percent to 3,152.71.
The Shanghai gauge dropped 4.5 percent last week, the most in two months, amid concerns the government will limit loan growth and increase interest rates to slow the economy. It has declined 10 percent this year.
The government plans new measures to rein in overcapacity in steel, cement and other industries amid a surge in bank lending, People's Bank of China Deputy Governor Zhu Min said in an interview in Davos.
Hang Seng advances
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CCB rose 1.84 percent to HK$6.09 ($78 cents). The bank's shares dropped 10.34 percent last month as investors sold banking stocks after the central government moved to curb fast-rising bank lending. A report said CCB aimed to lend 750 billion yuan ($109.9 billion) over the course of 2010.
The benchmark Hang Seng Index was up 121.76 points at 20243.75, rebounding after posting its worst monthly pecentage loss in 15 months in January. The China Enterprises Index closed up 1.07 percent at 11621.64.
Bloomberg News-Reuters
