| Domestic stock markets close at two-week low |
SHANGHAI, Mar. 14 -- Chinese mainland's stocks had the biggest drop in two weeks, on concern this year's gains have outstripped earnings growth prospects. Citic Securities Co led the decline.
"As indexes move up higher, investors become more jittery about valuations and tend to sell shares," Fan Dizhao told Bloomberg, who helps manage the equivalent of US$1.8 billion at Guotai Asset Management Co in Shanghai. "The market is at a frenzy now as more than 800 stocks have risen more than 50 percent so far this year."
Stocks also fell as concern heightened that a rise in US mortgage delinquencies and slower retail sales there will curb growth in the world's biggest economy.
The Shanghai Composite Index, which tracks the bigger of mainland's stock exchanges, slid 2 percent to 2,906.33. The Shenzhen Composite Index, which covers the smaller one, dropped 0.8 percent to 772.34.
Citic Securities, mainland's biggest publicly traded brokerage, declined 1.97 yuan, or 4.5 percent, to 41.39 yuan. The shares have surged 51 percent this year. China Merchants Bank Co, the nation's third-biggest publicly traded lender, lost 0.44 yuan, or 2.8 percent, to 15.54 yuan.
Industrial & Commercial Bank of China, the nation's largest bank and also the worst performing stock in the benchmark index this year, lost 0.12 yuan, or 2.4 percent, to 4.92 yuan. The shares have dropped 21 percent this year.
China Vanke Co, the mainland's biggest property developer, slid 0.55 yuan, or 3.5 percent, to 15.05 yuan. Baoshan Iron & Steel Co, China's biggest steelmaker, declined 0.35 yuan, or 3.8 percent, to 8.90 yuan.
"The market sentiment is very fragile at the moment," said Wang Zhewen, who helps manage US$1.2 billion in Chinese stocks for Fortis NV in Shanghai. "The US stocks' drop also affected the Chinese market."
A report by the US Mortgage Bankers Association yesterday showed the number of borrowers with the best credit who were at least 30 days late in their mortgage payments reached the highest level in almost four years. Delinquencies for subprime borrowers reached 13.33 percent, also the highest since 2003's second quarter.
In addition, retail sales in the US rose 0.1 percent in February after being unchanged in January, according to the US Commerce Department. Economists in a Bloomberg News survey predicted retail sales would increase 0.3 percent last month.
The US accounts for about a fifth of China's exports.
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