The Shanghai Composite Index (SHCOMP) slumped 2.6 percent at the close, reversing an earlier 0.8 percent gain. A relaxation of curbs on the property market would lead to “chaos,” Wen said at a press conference in Beijing today. A gauge tracking property stocks sank 3.7 percent, led by Poly Real Estate Group Co., while Anhui Conch Cement Co. paced losses by building- material companies.
“Wen’s speech has raised concern that property curbs may be kept in place for longer than previously expected,” said Zhang Ling, general manager at Shanghai River Fund Management Co. “Property accounts for a significant part of the economy.”
The Shanghai Composite had rallied 12 percent in 2012 through yesterday following two years of losses on speculation the central bank would add to a Feb. 18 cut in lenders’ reserve requirements to bolster economic growth. The government’s two- year effort to control the property market helped spur a 26 percent drop in home sales in the first two months of the year.
The Shanghai stock gauge closed 64.57 points lower at 2,391.23, the biggest loss since Nov. 30. The CSI 300 Index (SHSZ300) retreated 2.8 percent to 2,605.11. The Bloomberg China-US 55 Index, the measure of the most-traded U.S.-listed Chinese companies, added 2.1 percent in New York yesterday…”