Apr 10, 2012 -- China’s stocks fell, dragging the benchmark index to the lowest level this month, on concern government data today may show Chinese exports slowed in March.
The Shanghai Composite Index (SHCOMP) dropped 5 points, or 0.2 percent, to 2,280.82 at 9:36 a.m. local time. The CSI 300 Index (SHSZ300) declined 0.1 percent to 2,492.89. The Bloomberg China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, retreated 1.1 percent in New York yesterday.
“The economy isn’t in very solid shape and growth may trend down further in coming months,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “The market may be under selling pressure because of growth concerns.”
About 6 billion shares changed hands in the Shanghai Composite yesterday, 31 percent lower than the daily average this year. Thirty-day volatility in the gauge was at 18, near the highest level in a month.
Equities fell yesterday as China’s inflation rate rose by a faster-than-estimated 3.6 percent in March, damping speculation the government will ease monetary policy to bolster economic growth. The losses for the Shanghai Composite trimmed this year’s gains to 3.9 percent. Stocks in the gauge are valued at 9.7 times estimated earnings, compared with a record low of 8.9 times on Jan. 6, according to weekly data compiled by Bloomberg.
China may report a trade deficit of $3.15 billion for March, according to the median estimate of 30 economists surveyed by Bloomberg. That would be the first time since 2004 that China has reported back-to-back monthly deficits after data showed imports exceeded exports by $31.8 billion in February.
March exports may have gained 7 percent from a year earlier and imports may have increased 9 percent, according to the median of 29 economists’ estimates. The customs bureau is scheduled to release the data at around 10 a.m. in Beijing.
The central bank may also announce new lending and money supply data as early as today.
The Securities Times reported Hangzhou Glory Real Estate became the first developer to file for bankruptcy after China imposed real estate curbs. A local court has agreed to review Hangzhou Glory’s bankruptcy filing, the newspaper said, citing a text message from Yuhang district government in the city.
Bankruptcy may either drive more price cuts at developers or stimulate local government support for developers, it said. Calls to Hangzhou Glory seeking comments were unanswered before business hours.
The lowest Chinese stock valuations since 2005 are a buy signal to the biggest emerging-market money managers, who say the economy will avoid a hard landing as the government bolsters growth.
The MSCI China Index (MXCN) of shares available to foreign investors fell the most among global equity indexes last month, dragging it to nine times estimated profit, a 23 percent discount to the MSCI All-Country World Index (MXWD), data compiled by Bloomberg and MSCI Inc. show. The last time the gap was this big, in December 2005, the China index beat the global gauge by about 60 percentage points in 12 months.
Chinese shares will rally after the strongest manufacturing reading in 12 months on April 1 showed that the economy is weathering a slowdown in exports, according to Allianz Global Investors. The government may boost spending and loosen monetary policy to keep growth above its 7.5 percent target, said Schroders Plc, which oversees about $291 billion. Hong Kong markets open today after being shut for holidays since April 5. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in New York has lost 1.1 percent since then, while the Shanghai Composite Index sank 0.7 percent.
“We’re reaching levels in Chinese equities which are clearly becoming quite attractive,” Bart Turtelboom, the London-based co-head of emerging markets at GLG Partners, which oversees about $26 billion, said in a March 28 interview. “We have been increasing our positions.”