China's Stocks Fall to 6-Month Low


China's stocks fell to a six-month low, with the benchmark having its second-worst monthly performance on record. Coal producers China Shenhua Energy Co. dropped on concern the worst snowstorms in decades will strain supply and disrupt deliveries.

Banks including China Merchants Bank Co. fell after BNP Paribas SA cut the rating on China's financial companies.

The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, declined 90.25, or 1.9 percent, to 4,620.40 at the close, the lowest since Aug. 3. The measure dropped 13 percent this month, the second-steepest monthly slide -- after November's 17 percent fall -- since it was introduced in 2005.

The decline reduced China's market capitalization to $3.91 trillion as of yesterday, helping Japan regain the title of the biggest stock market in the Asia-Pacific region, according to data compiled by Bloomberg. The market capitalization of the Japanese market was $4.23 trillion.

Yanzhou Coal Mining Co., the listed unit of China's fourth- biggest coal miner, slumped 2.09 yuan, or 9.6 percent, to 19.61. Its Hong Kong-listed stock was downgraded to ``sell'' from ``neutral'' and had its share-price estimate cut by 40 percent at Goldman, Sachs & Co.

China is experiencing the worst blizzards in 50 years, bringing railway services to a standstill and forcing the government to mobilize the largest deployment of troops in a decade to clear ice.

Roads, railways and power supplies across much of central, southern and eastern China were paralyzed late yesterday. More than 750,000 houses have been damaged or destroyed.


TradingEconomics.com, Bloomberg
1/31/2008 7:46:53 AM