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Hong Kong - Chinese stocks fell the most in more than two weeks as tumbling commodity prices weighed on raw-material producers and concern grew that a pickup in economic indicators will falter.
The Shanghai Composite Index declined 1.8% at 08:25, all but erasing gains for the week, as Jiangxi Copper and Yanzhou Coal Mining slid more than 2%. In Hong Kong, the Hang Seng China Enterprises Index dropped for a fifth day, the longest run of losses since December, with financials and commodity producers leading the retreat, while the offshore yuan headed for the biggest weekly loss since March.
The declines come after private and official data for Chinese manufacturing released in the past week missed economists’ forecasts, suggesting weakness in an economy weighed down by overcapacity and slow growth in external demand.
Exports were probably little changed last month following a surprise 11.5% jump in March, according to the median estimate in a Bloomberg survey before data due Sunday. The nation’s foreign-exchange reserves likely declined, shows another poll, in an indication of renewed capital outflows.
“Some macro data this week raised doubts over the sustainability of the economic rebound, which is causing the market to pull back,” said Linus Yip, a Hong Kong-based strategist at First Shanghai Securities. “The market is on the weak side and gripped in a correction. It seems to be that some stimulus is needed for the market to stage a rebound.”
The Shanghai Composite fell to 2 945.42, paring its weekly advance to 0.2%. The Hang Seng China gauge declined 1.4%. The Hang Seng China AH Premium index, which measures the price gap between dual-listed shares in China and Hong Kong, climbed for a fifth day. Trading volumes in Shanghai were 11% above the 30-day average for the time of day.
“There are greater selling pressures as the Shanghai Composite moves closer to the 3 000 level,” said Yen Chiu, a sales trader at China Securities International Financial Holding in Hong Kong. “It’s more of a change in sentiment ahead of a slew of economic data and weekend rather than concrete speculation or news affecting the market.”
All industry groups fell on the CSI 300 index, with Tsingtao Brewery slumping to pace declines in a gauge of consumer-staples stocks. Energy and commodity producers shed more than 2% each amid signs raw-material futures were calming down after frenzied trading. October contracts for steel reinforcement bar slumped 11% this week, the most since trading started in 2009.
Property decline
A measure of developers in Shanghai retreated 1.4%, following three days of gains. China Enterprise slid more than 4%, among the biggest laggards on the index. The ChiNext index for smaller companies slid 2.5%.
In Hong Kong, China Longyuan Power Group and PetroChina declined more than 1.2%, while Citic Securities slid 2.5%. FIH Mobile slumped 20%, the most since October 2008, after the company said it expects six-month profit to sink as much as 92%.
“Investors are going back to fundamentals rather than speculation, so we expect the correction to continue,” said Ben Kwong, a director at brokerage KGI Asia in Hong Kong. “Now the market seems to be looking for an excuse to correct rather than a rally.”
