China Stocks Fall for First Time in Week on Exports Data
China’s stocks fell, sending the benchmark index lower for the first time in more than a week, after exports and new bank loans grew less than estimated, boosting concern the nation’s economic slowdown is deepening.
Jiangxi Copper (600362) Co. led declines for material stocks on demand concerns after government data showed China’s exports rose 1 percent in July, compared with economists estimate for 8 percent growth. TCL Corp. (000100) dropped for the first time in six days after the consumer electronics company reported a decline in first-half net income. Kweichow Moutai Co. slid 4.9 percent after the biggest baijiu liquor maker’s profit growth slowed.
“The export figures show that it’s hard to improve China’s economy in the short term,” said Cao Xuefeng, an analyst at Huaxi Securities Co. in Chengdu. “There are definitely expectations for more reserve-ratio requirement cuts and other measures to boost the economy, but I doubt they will be effective. There are limited tools the government can use.”
The Shanghai Composite Index (SHCOMP) slipped 0.2 percent to 2,168.81 at the close. The CSI 300 Index (SHSZ300) slid 0.5 percent to 2,399.75. The Shanghai index climbed 1.7 percent this week, a second week of gains, on speculation slowing growth and easing inflation will allow the government to loosen monetary policy and adopt more fiscal measures.
China’s export growth was close to zero in July, raising the odds the government will take more-aggressive measures to support an economy the grew 7.6 percent in the second quarter, the slowest pace since 2009.
Greater Pressure
The growth in July exports compared with 11.3 percent in June, the customs bureau said. Imports rose 4.7 percent, compared with the estimate for a 7 percent gain and a 6.3 percent increase in June. The trade surplus was $25.1 billion compared with $31.5 billion a year earlier The median projection for the trade surplus was $35.1 billion.
China faces greater pressure in the second half of the year in order to realize the country’s 10 percent trade growth target for this year, Vice Commerce Minister Gao Hucheng said at a briefing in Beijing.
Jiangxi Copper, the biggest producer of the metal, declined 1.6 percent to 21.72 yuan. Yunnan Copper Industry Co. fell 1.3 percent to 16.89 yuan. Three-month copper fell as much as 1 percent to $7,460 a metric ton on the London Metal Exchange.
Deutsche Bank AG, which lowered its growth forecast for the Chinese economy after yesterday’s inflation and industrial output data, said it expects one interest-rate cut and two cuts in banks’ reserve-ratio requirements for the rest of the year as well as “modest” tax cuts for small businesses.
