BEIJING: China’s stocks fell from a seven-year high, led by industrial and financial companies, after inflation data signaled weaker demand and traders weighed whether MSCI Inc. will add mainland securities to its global indexes.
CRRC Corp., formed by merging rail companies CSR Corp. and China CNR Corp., plunged 7.1 percent. Haitong Securities Co. dropped more than 2 percent in Shanghai and Hong Kong. The consumer-price index rose 1.2 percent in May, data showed Tuesday, compared with an estimated 1.3 percent increase, while the producer-price index fell 4.6 percent, exceeding the forecast for a 4.5 percent drop.
The Shanghai Composite Index slid 1.2 percent to 5,068.57 at the 11:30 a.m. local-time break, dropping from the highest level since January 2008. The inflation data come a day after a trade report showed exports declining for a third month. Trading volumes in Shanghai were 34 percent above the 30-day average before MSCI decides on Tuesday in New York whether to add China’s locally traded shares in its equity benchmarks.
“A trio of growth engines — exports, consumption and investments is all weak and argues for more aggressive stimulus to jump start the economy,” said Neil Lee, a Hong Kong-based analyst at Pedder Street Investment Management Ltd. “What’s heavily on the minds of traders today is also MSCI’s decision which is a close call. The market will stay very volatile.”
