China’s stock-index futures fell as the International Monetary Fund cut its economic growth forecast for the nation and speculation grew corporate earnings are worsening, overshadowing increased railway spending.
Futures on the CSI 300 Index (SHSZ300) expiring in July, the most active contract, lost 0.2 percent to 2,410.40 as of 9:20 a.m. local time. The Shanghai Composite Index (SHCOMP) dropped 1.7 percent to 2,147.96 yesterday, the lowest close since March 2009. The CSI 300 Index declined 2.1 percent to 2,399.73. The Bloomberg China- US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, retreated 1.4 percent in New York.
About 6.8 billion shares changed hands in the Shanghai Composite yesterday, 19 percent lower than the daily average this year. Thirty-day volatility in the gauge was at 14.7, the lowest since June 12.
The Shanghai Composite has fallen 13 percent from this year’s high recorded in March, erasing a gain of as much as 12 percent in 2012, on concern an economic slowdown is deepening. The measure is valued at 9.5 times estimated profit, compared with the 17.5 average since Bloomberg began compiling the data in 2006.
The 14-day relative strength measure for the Shanghai index, measuring how rapidly prices have advanced or dropped during a specified time period, was at 30.7 yesterday. Readings below 30 indicate it may be poised to rise.
The IMF cut its forecast for China’s 2012 economic growth to 8 percent yesterday from 8.2 percent projected in April and the estimate for next year to 8.5 percent from 8.8 percent. The fund also lowered its 2013 global growth forecast to 3.9 percent from 4.1 percent.
The downward pressures are so strong that the slowdown in China’s economy may extend beyond the third quarter without more policy measures, Reuters reported yesterday, citing Chen Dongqi, deputy head of the National Development and Reform Commission’s macroeconomic research institute.
China’s economy grew 7.6 percent in the second quarter, the least in three years, the statistics bureau said on July 13. It expanded 8.1 percent in the previous three months.
Foreign direct investment in China dropped 3 percent in the first six months from a year earlier to $59.1 billion, the Xinhua News Agency reported yesterday, citing Vice Commerce Minister Wang Chao. The figure is due as early as today.
--Zhang Shidong. Editors: Allen Wan, Richard Frost
To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net; Belinda Cao in New York at lcao4@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
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