China’s stocks fell for the first time in six days, narrowing the benchmark index’s biggest monthly gain in a year, after Premier Wen Jiabao said the government should “firmly” maintain property curbs.
China Vanke Co. and Huaxia Bank Co. led a gauge of financial companies to its first drop in more than a week after the government said local authorities should continue to strictly implement tight policies in the property industry in the coming months. Baoshan Iron & Steel Co., the biggest publicly traded steelmaker, slid the most in two weeks and China Railway Group Ltd. dropped 2.2 percent after earnings for both companies slumped in the third quarter.
“It’s too early to celebrate after the rally as the government is still keeping its control policies,” said Tu Jun, a strategist at Shanghai Securities Co. “The market may be range-bound at current levels and the uncertainty over policy easing will lead to volatility.”
The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, dropped 17.3 points, or 0.7 percent, to 2,456.16 at 1:06 p.m. local time. The gauge advanced 6.7 percent last week, the biggest gain since the period ended Oct. 15, 2010. The CSI 300 Index slid 1 percent to 2,681.82.
A gauge tracking real estate companies in the Shanghai Composite dropped 1 percent, the most among five industry groups, and the first slide since Oct. 20. China Vanke, the biggest developer, sank 1 percent to 7.83 yuan. Gemdale lost 1.6 percent to 5.06 yuan. Huaxia Bank retreated 2.8 percent to 11.14 yuan, set for the biggest drop since Oct. 18.
China will “firmly” maintain its property curbs and “fine tune” other economic policies at an appropriate time, according to a statement following a State Council meeting chaired by Premier Wen.