Mainland equities fall to 6-month low
Stocks on the Chinese mainland fell, dragging the benchmark index down to a six-month low, after a government report showed imports rose less than anticipated in June while export growth slowed.
Shenzhen Chiwan Wharf Holdings Ltd led a decline for port operators as a gauge of export orders showed a contraction for the first time since January, suggesting that overseas shipments may slow in coming months.
Poly Real Estate Group Co, the nation's second-biggest developer, slumped 3.7 percent after forecasting lower first-half profit. PetroChina Co rose the most in two months on speculation the energy producer's shares are undervalued after plunging to a record low on Monday.
"Trade data are pretty weak," said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co, which oversees $285 million. "Worries about the strength of the economy will weigh on the market and drive stocks down."
The Shanghai Composite Index slipped 6.4 points, or 0.3 percent, to 2,164.44 at the close, the lowest since Jan 6. The CSI 300 Index sank 0.4 percent to 2,406.71.
The Shanghai index has fallen 1.6 percent this year, reversing a gain of as much as 12 percent, on concern the government isn't doing enough to stem the slowdown.
Thirty-day volatility in the Shanghai Composite was at 15.62 on Tuesday, compared with this year's average of 18.13.
China's inbound shipments increased 6.3 percent from a year earlier, the General Administration of Customs said in a statement on Tuesday in Beijing. Overseas sales gained 11.3 percent. The trade surplus rose to a three-year high of $31.7 billion.
"There's something bad for everyone in this," said Tim Condon, chief Asia economist at ING Financial Markets in Singapore, who previously worked at the World Bank.
"On the import side the news is just bad," with evidence of weak investment spending, which "reinforces hard-landing worries".
Shenzhen Chiwan slumped 4.8 percent to 9.84 yuan ($1.55). Shanghai International Port (Group) Co, the operator of the world's second-busiest harbor, slipped 0.4 percent to 2.69 yuan.
A gauge of property stocks in the Shanghai Composite dropped 2.1 percent, the most among five industry groups. Poly Real Estate dropped for the first time in eight days, losing 3.6 percent to 12.53 yuan. Gemdale Corp, the fourth-biggest developer by market value, slumped 1.6 percent to 6.84 yuan.
Government data showed the consumer price index rose 2.2 percent in June, the slowest pace in more than two years, following the second interest-rate cut in a month last week.
(China Daily 07/11/2012 page16)
