BEIJING: China’s stocks fell to a one-week low, led by industrial companies, after the government set the lowest economic growth target in more than 15 years and concern grew new share offerings will divert funds from existing equities.
Air China Ltd. and China Railway Construction Corp. slid more than 2 percent to pace declines for industrials. Financial and energy stocks also slumped, with Bank of China Ltd. sliding 2.3 percent and PetroChina Co. dropping for a fourth day. Drug and environment-related shares outperformed the market, with Jiangsu Hengrui Medicine Co. jumping 2.1 percent and Zhejiang Feida Environmental Science & Technology Co. rising 7.1 percent.
The Shanghai Composite Index slid 1 percent to 3,246.68 at the 11:30 a.m. break, the lowest since Feb. 25. Premier Li Keqiang set a 2015 expansion goal of about 7 percent, down from last year’s target of 7.5 percent. The gauge has risen 40 percent in the past six months and trades at 12.3 times estimated profit for the next 12 months, compared with the five-year average of 10.3, according to data compiled by Bloomberg.
“The 7 percent goal means the government will focus on the quality of growth, while addressing issues like pollution,” said Yan Liu, a trader at Guosen Securities Co. in Shenzhen. “There were high expectations over new policies. Some selective sectors such as health care, environment and high-profile developers may remain in demand.”
The CSI 300 Index declined 1 percent. Hong Kong’s Hang Seng China Enterprises Index dropped for a third day, losing 0.3 percent, while the Hang Seng Index slipped 0.6 percent. Trading volumes in Shanghai were 8.4 percent above the 30-day average for this time of day.
