BEIJING: China’s stocks tumbled 1st time in six days, led by financial and commodity companies, after industrial profits crisis.
Air China Ltd. and Chinese Eastern Airlines Co. dropped more than 2 percent to lead declines for industrial companies. PetroChina Co. and Industrial & Commercial Bank of China Ltd., the nation’s two biggest stocks, retreated at least 3 percent.
The Shanghai Composite Index (SHCOMP) slid 0.9 percent to 3,352.96 at the close, halting a five-day, 8.6 percent gain. Industrial profits declined 8 percent from a year earlier, the National Bureau of Statistics said. That’s the biggest drop since at least October 2011.
“The weak data provide investors with an excuse to sell shares to lock in some profits,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “After the good performance recently, the market has probably entered a correction.”
The CSI 300 Index declined 0.9 percent. Hong Kong’s Hang Seng China Enterprises Index (HSCEI) slid 1.5 percent at 3:23 p.m., while the Hang Seng Index retreated 0.5 percent. The Bloomberg China-US Equity Index added 0.2 percent in New York yesterday.
Trading volumes in the Shanghai index were 8.1 percent lower than the 30-day average today, according to data compiled by Bloomberg. The gauge has gained 65 percent over the past year, making it the best performer among 93 global indexes tracked by Bloomberg, on speculation the central bank will ease monetary policy to support the economy. The measure is valued at 12.6 times 12-month projected earnings, close to the highest level since April 2011, according to data compiled by Bloomberg.
