Jan. 7 (Bloomberg) -- Chinese equities traded in the U.S. fell, dragging the benchmark index down from a four-week high, on concern the Asian nation’s economy may slow further before rebounding as Europe’s debt crisis curbs its export growth.
The Bloomberg China-US 55 Index sank 1.3 percent to 98.63 at 12:41 p.m. in New York, trimming gains this week to 2.9 percent. Mobile chip designer Spreadtrum Communications Inc. sank to a four-month low after RF Micro Devices Inc. said demand from China-based customers weakened in the last quarter. PetroChina Co. slid for the first day in four, narrowing a premium over its Hong Kong-traded stock to 0.7 percent.
China will roll out measures to boost consumption this year as it strives to meet challenges posed by a global slowdown, Commerce Minister Chen Deming said Jan. 5. The nation’s growth is unlikely to see a “quick” rebound due to a correction in property prices, Credit Suisse Group AG economist Dong Tao said yesterday.
“China has entered a medium-term economic slowdown,” Tao, a Hong Kong-based economist with Credit Suisse, said in Singapore. “China’s property developers are running out of money and some may go under this year.”
An index of executive and consumer sentiment in the 17- nation euro area fell to 93.3 in December, the lowest in more than two years, the European Commission in Brussels said yesterday. Factory orders in Germany, the region’s largest economy, dropped 4.8 percent in November, the most in almost three years, according to the Economy Ministry in Berlin.
Spreadtrum, a Shanghai-based designer for wireless communications chips, fell 17 percent to $15.97 in New York. RF Micro, a U.S. maker of radio frequency components and semiconductor technologies, said Jan. 5 sales fell short of estimates for the quarter ended in December, as demand from Chinese customers for second-generation components for entry- level handsets was below expectations.
The selloff sparked by concern about the weakness in the Chinese market “was unwarranted as people are not reading this right,” said Jay Srivatsa, managing director of equity research at Chardan Capital Markets in New York. “The company is in mid- to higher-end feature type of products and the 3G business is where the company is really focused on. I expect them to continue doing well going forward.”
Focus Media Holding Ltd., a digital advertising company based in Shanghai, slumped 6.7 percent, the biggest intraday decline since Dec. 14, after short-selling firm Muddy Waters LLC questioned an acquisition of Focus Media in a report yesterday.
The acquisition by Focus Media of a ginseng plantation at the Russian and North Korean border was “bizarre,” Muddy Waters said in a report on its website. One of the selling shareholders included at least one employee of Focus, the report said.
Muddy Waters said in November that Focus was overstating the size of its advertising network. Focus Media disclosed Dec. 22 a second survey result by market research company Synovate, which showed that the number of LCD screens and poster frames Focus claimed to have by Nov. 28 was more than 99.95 percent accurate.
Oil producers retreated after jumping more than 5 percent a day earlier. Crude oil for February delivery fell as much as 0.9 percent to $100.88 a barrel.
The American depositary receipts of PetroChina, the biggest oil producer in the country, declined 1.2 percent to $137.90. China Petroleum & Chemical Corp., the second-largest, slid 1.3 percent to $114.01. Cnooc Ltd., the biggest offshore explorer, slumped 1.1 percent to $194.22. Each ADR represents 100 common shares.
--Editors: Marie-France Han, Glenn J. Kalinoski
To contact the reporter on this story: Belinda Cao in New York at email@example.com
To contact the editor responsible for this story: David Papadopoulos at firstname.lastname@example.org