Developers, banks lead drop in stocks

SHANGHAI - China's stocks fell, led by banks and developers, after the official China Securities Journal said deflating the housing bubble is "necessary" and Citigroup Inc forecast prices may drop 20 percent.

China Vanke Co, the nation's biggest listed developer, slumped 2.6 percent to the lowest in more than a year and Poly Real Estate Group Co lost 1.4 percent. Bank of Communications Ltd, part-owned by HSBC Holdings Plc, tumbled 4.8 percent after saying it made fewer mortgage loans over the past two months. PetroChina Co, the biggest oil producer, retreated 1.7 percent as crude oil fell.

The Shanghai Composite Index dropped 33.79, or 1.1 percent, to 2,999.48 at the close, the fifth decline in six days. The CSI 300 Index fell 1.1 percent to 3,201.54. Futures on the CSI 300 expiring in May, the most active contract, slipped 0.9 percent to 3,236.2.