Chinese stocks sank in New York, pushing the benchmark index to a 20-month low, after data signaled the manufacturing slowdown in Asia’s biggest economy is worsening.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. tumbled 3.6 percent to 83.14, the lowest close since October 2011. E-Commerce China Dangdang Inc. (DANG:US), the country’s biggest online bookseller, plunged 10 percent as fashion retailer Vipshop Holdings Ltd. (VIPS:US) tumbled amid intensifying competition in the e-commerce sector. American depositary receipts of Cnooc Ltd. traded at the widest discount to the Hong Kong shares since November 2011.
A preliminary reading of 48.3 for the Chinese Purchasing Managers’ Index released by HSBC Holdings Plc and Markit Economics yesterday showed manufacturing slowing faster than analysts surveyed by Bloomberg had estimated. Equities slumped globally after Federal Reserve Chairman Ben S. Bernanke said yesterday the U.S. central bank may end its bond buying program in the middle of 2014 as the economy strengths. Twelve-month yuan forwards weakened the most in six weeks in New York.
“China PMI continues to show contraction and we continue to see uneven economic data globally,” Timothy Ghriskey, the chief investment officer at Solaris Group LLC in New York, which manages more than $1.5 billion in assets, said in a telephone interview. “A weak stock market in China or the U.S. weighs directly on consumers as they cut back purchases.”
The iShares FTSE China 25 Index Fund (FXI:US), the largest Chinese exchange-traded fund (FXI:US) in the U.S., plunged 4.2 percent to $32.21, the lowest close since September. The Standard & Poor’s 500 Index tumbled 2.5 percent to 1,588.19, the biggest slump since November 2011.
The HSBC PMI reading compared with a 49.1 median estimate of 15 analysts surveyed by Bloomberg. China’s seven-day repurchase rate, a measure of interbank funding availability, surged 2.7 percentage points to 11.2 percent yesterday, the highest level in data going back to 2003.
Beijing-based E-Commerce, known as Dangdang, tumbled to $6.90, sinking the most since May 2012. Trading volume on Dangdang was three times the daily average over the past three months, data compiled by Bloomberg showed.
Vipshop, which sells branded fashion online at discounts, dropped 8.8 percent to $26.44, the lowest close since March. Short interest (VIPS:US) on its stock jumped to a record 16 percent of its outstanding shares, data from Markit showed.
Vipshop agreed to invest a total 1.6 billion yuan ($260 million) in building a logistics center in China’s central Hubei province, according to a report June 19 on the technology news website of Tencent Holdings Ltd.
The company confirmed the report, according to a note yesterday by Hong Kong-based 86Research Ltd. The project “will benefit VIPS’s expansion in the long run, but adversely impact cash flows (VIPS:US) in the short term,” analysts wrote. “As the competition intensifies in flash sales, we expect to see more brand marketing impacts its profit.”
Yingli Green Energy Holding Co., the world’s second-biggest solar cell maker, fell 10 percent to $2.82. Trina Solar Ltd. (TSL:US), the fourth-largest, dropped 9.3 percent to $5.44 in a third day of slump.
Average cell spot price declined the most since Dec. 12 in the past week, data compiled by Bloomberg showed.
Cnooc, the biggest offshore oil explorer, sank 5 percent to $164.07, the lowest level since October 2011. Its ADRs, each representing 100 underlying shares in the Beijing-based company, traded 2.4 percent below its Hong Kong shares.
ADRs of PetroChina Co., the nation’s biggest oil producer, declined 3.2 percent to $103.06, the lowest level since May 2010. China Petroleum and Chemical Corp., Asia’s biggest oil refiner, tumbled 4.9 percent to $87.34, the lowest price since July 2012.
West Texas Intermediate crude futures for July delivery dropped 2.9 percent, the most in seven months, to settle at $95.40 a barrel on the New York Mercantile Exchange.
The Hang Seng China Enterprises Index in Hong Kong dropped 3.3 percent to 9,265.30, the biggest loss in 13 months. The Shanghai Composite Index (SHCOMP) slumped 2.8 percent to a six-month low of 2,084.02.
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