CHINA STOCKS DROP TO 5-MONTH LOW AS CITIGROUP CUTS GDP ESTIMATE
Bloomberg, June 25, 2012
China’s stocks fell, dragging the benchmark index to a five-month low, as Citigroup Inc. cut the nation’s growth forecast on concern Europe’s debt crisis will reduce demand for exports.
Jiangxi Copper Co. (600362), the biggest Chinese producer of the industrial metal, slid to the lowest level since January after Citigroup said China’s economy may grow 7.8 percent this year, compared with a previous estimate of 8.1 percent. China Vanke Co. and Poly Real Estate Co. led a gauge of developers lower after the China Securities Journal said the government should impose a “reasonable” property tax. Citic Securities Co. and Haitong Securities Co. retreated more than 2 percent.
The Shanghai Composite Index (SHCOMP) lost 1.1 percent to 2,235.87 at 2:07 p.m. local time, poised for the lowest close since Jan. 16. The CSI 300 Index (SHSZ300) declined 0.9 percent to 2,489.99. China’s markets were closed for a holiday on June 22. The Bloomberg China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, gained 0.4 percent at the close in New York.
“Investors remain very concerned about the deteriorating economy and the European situation,” said Cao Xuefeng, an analyst at Huaxi Securities Co. in Chengdu. This month’s interest-rate cut “didn’t seem to boost stocks a lot, as even speculation about more loosening isn’t helping sentiment.”
The Shanghai Composite has fallen 5.7 percent in June, set for the worst monthly performance since March, even as the central bank announced a reduction in deposit and lending rates on June 7 to prevent economic growth from falling below the government’s target of 7.5 percent this year.
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