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China Industrial Output Much Weaker Than Expected

China’s stocks fell, heading for their longest losing streak in three months, as the country’s industrial output had the weakest start to a year since 2009 and lending and retail sales growth slowed.

Ping An Bank Co. led lenders lower after the nation’s new loans last month trailed analyst estimates. Liquor maker Sichuan Swellfun Co. dropped among consumer companies after the country’s retail sales growth in the first two months was the smallest for that period since 2004.

“The economic recovery is weaker than expected,” said Wang Zheng, Shanghai-based chief investment officer at Jingxi Investment Management Co., which manages $120 million. “Investors are worried that stocks may already have moved ahead of fundamentals.”

The Shanghai Composite Index (SHCOMP) dropped 0.8 percent to 2,299.17 at 9:39 a.m. local time, trimming its gain since last year’s Dec. 3 low to 17 percent. The CSI 300 Index (SHSZ300) declined 1.2 percent to 2,588.31. The Hang Seng China Enterprises Index (HSCEI) added 0.1 percent in Hong Kong. The Bloomberg China-US 55 Index (CH55BN) rose 1 percent in New York on March 8.

The Shanghai index retreated 1.7 percent last week on concerns the government will tighten monetary policy and regulators will allow the resumption of initial public offerings.

Industrial production climbed 9.9 percent in the first two months and retail sales rose 12.3 percent, the statistics bureau said over the weekend, trailing economists’ estimates. New local-currency loans in February fell to 620 billion yuan ($99.6 billion), the People’s Bank of China said, less than the estimates of 27 out of 28 analysts in a Bloomberg News survey.

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