Markets

Stocks dip after easing rumors prove false - July 13

By Zhang Shidong (China Daily)
Updated: 2010-07-14 10:29
Large Medium Small

SHANGHAI: Mainland stocks fell, with the benchmark index declining the most in two weeks, after the government quashed speculation it will abandon real-estate curbs that drove property prices lower for the first time in 16 months.

Related readings:
Stocks dip after easing rumors prove false - July 13 China shares fall on reaffirmed property curbs
Stocks dip after easing rumors prove false - July 13 Property stocks rally on Monday
Stocks dip after easing rumors prove false - July 13 Wall Street edges higher ahead of earning season
Stocks dip after easing rumors prove false - July 13 Mainland stocks get shot in arm

China Vanke Co and Bank of China Ltd dropped among developers and lenders after the government said it will "strictly" enforce housing policies to prevent speculative real estate investment. Jiangxi Copper Co, China's biggest producer of the metal, slid 3.1 percent, ending five days of gains, while China Shenhua Energy Co retreated 2.3 percent.

"It's hard to believe that the government would reverse its crackdown on the property industry so quickly and anyone who hoped so is now disappointed," said Zhang Ling, a fund manager at Shanghai River Fund Management Co.

The Shanghai Composite Index lost 40.43, or 1.6 percent, to 2450.29 at the close, the biggest decline since June 29. The CSI 300 Index fell 1.6 percent to 2634.59.

The Shanghai Composite jumped 3.7 percent last week, the most this year, on speculation the government will adopt a looser monetary policy. The gauge has slumped 25 percent in 2010, making it Asia's worst performer, on concern government efforts to curb inflation and property speculation will slow the economy.

China's property prices fell 0.1 percent in June from the previous month, ending 15 months of gains, statistics bureau data showed on Monday. New lending of 603 billion yuan ($89 billion) last month was the least in three months, the central bank said July 11.

Hang Seng declines

Hong Kong stocks fell for the first time in four days as developers slid after China said it will maintain curbs on speculative home purchases.

The Hang Seng Index dropped 0.2 percent to close at 20431.06, after rising as much as 0.3 percent. That halted the measure's three-day, 3.1 percent gain. The Hang Seng China Enterprises Index slid 0.4 percent to 11622.61.