China Stocks Fall Most in 3 Weeks on Economic

Bloomberg, (14/5) -- China’s stocks fell the most in three weeks after JPMorgan Chase & Co. cut its growth outlook for the nation’s economy and concern grew the government is introducing more property restrictions to limit gains in housing prices.

The Shanghai Composite Index fell 1.6 percent to 2,206.52 at the 11:30 a.m. break, the most since April 23. The CSI 300 Index slid 2 percent to 2,480. The Hang Seng China Enterprises Index slid 0.7 percent. The Bloomberg China-US Equity Index lost 1.4 percent yesterday after data showed April industrial output growth trailed estimates and retail sales slowed.

“The macro data hasn’t been good, so there’s not much to drive up stocks,” said Cao Xuefeng, an analyst at Huaxi Securities Co. in Chengdu. “Support for Shanghai Composite could be at 2,150 for the rest of May.”

There’s no indication the government’s policy stance will be shifted quickly to support near-term growth, the JPMorgan report said. China can’t cut interest rates because of abundant global liquidity, the China Securities Journal reported today, citing Zhu Baoliang, head of the State Information Center’s economic forecast department. Adjustments to the economy should be made through fiscal policies, the report cited Zhu as saying.

“Yesterday’s industrial production was disappointing and investors were unable to breach 2,250 level successfully, so it’s starting to look bad today,” said Du Liang, an analyst at Shanxi Securities Co. “Investors are still digesting the macro data.”
Developers Slide

Foreign direct investment data for April may be released as early as today. FDI probably rose 6.2 percent in April from a year earlier, compared with a 5.7 percent gain in March, according to the median estimate of eight economists surveyed by Bloomberg.