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China Continues to Ratchet Up Property Curbs

Chinese stocks fell, dragging the benchmark index to a two-month low, as real estate and construction companies tumbled on concern policy makers will step up property curbs.

Sina.com reported the southern city of Shenzhen banned developers from raising home prices, citing discussions with property companies. Poly Real Estate Group Co. and Gemdale Corp. declined more than 3 percent. Sany Heavy Industry Co. (600031), the nation’s biggest maker of construction machinery, lost 2.1 percent. CSR Corp. (601766) and China CNR Corp., the nation’s top train makers, slumped at least 3.7 percent on concern the dismantling of the rail ministry will curb state spending.

“Property curbs and the central bank’s possible attitude towards tightening liquidity make investors nervous,” said Wang Weijun, a strategist at Zheshang Securities Co. inShanghai. “There’s concern the economic recovery will falter.”

The Shanghai Composite Index (SHCOMP) dropped 1 percent to 2,263.97 at the close, capping a five-day, 3.6 percent losing streak that’s the longest in four months. The gauge also erased its gain for the year. The CSI 300 Index declined 1.1 percent to 2,527.49. The Hang Seng China Enterprises Index (HSCEI)retreated 2.2 percent in Hong Kong, taking its loss from a Feb. 1 high to 9.6 percent. The Bloomberg China-US 55 Index (CH55BN) fell 1.7 percent in New York yesterday.

The Shanghai Composite Index has lost 7 percent since this year’s high on Feb. 6 amid concern the government will tighten monetary policy at the same time as economic expansion slows. Data over the weekend showed inflation accelerated in February, while industrial output had the weakest start to a year since 2009 and lending and retail sales growth slowed.

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