ICBC Credit Suisse On China: Although a short-term bounce is possible, it’s not the time for bottom fishing. We need to see a clearer policy signal.”

“China’s benchmark stock index may extend declines after erasing all of its gains for 2011 yesterday as higher interest ratesslow economic growth without cooling inflation, ICBC Credit Suisse Asset Management Co. said.

The Shanghai Composite Index slumped 2.9 percent yesterday, the most since Jan. 17, after a preliminary reading of a purchasing managers’ index showed China’s manufacturing may expand at a slower pace this month. The guage has tumbled 9.3 percent from a five-month high on April 18 amid concern government tightening measures will slow earnings growth.

“We remain cautious in the near term and we haven’t seen the bottom yet,” said Hao Kang, a Beijing-based fund manager at ICBC Credit Suisse Asset, which oversees $8.7 billion. “The economy’s definitely slowing but we’ve yet to see inflation easing. Although a short-term bounce is possible, it’s not the time for bottom fishing. We need to see a clearer policy signal.” ”

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