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China’s Stocks Drop to Lowest Level Since 2009; Moutai Declines
12/4/2012 8:43:28 AM

Kweichow Moutai Co. dropped for a third day, pushing losses for a gauge of consumer staples producers over the past month to 20 percent after excessive levels of plasticizer were found in JiuGuiJiu Co. products. Chengdu B-Ray Media Co. plunged 10 percent, sending a gauge of small-company stocks to the lowest level since March 2009. Ping An Insurance (Group) Co. rose 1 percent after Haitong Securities Co. recommended that investors buy insurance stocks for next year.

The Shanghai Composite Index (SHCOMP) slipped 0.4 percent to 1,951.85 at the 11:30 a.m. break, heading for the lowest level since Jan. 15, 2009. The CSI 300 Index (SHSZ300) slid 0.2 percent to 2,105.73 while the Hang Seng China Enterprises Index (HSCEI) fell 0.2 percent. The Bloomberg China-US 55 Index (CH55BN) lost 0.9 percent.

“Investors have kind of given up for this year,” Zhang Haidong, analyst at Tebon Securities Co. analyst, said by telephone inShanghai. “The stock market hasn’t reached a bottom yet. Investors are concerned that demand for high-end products like liquor will suffer.”

Trading volumes in the Shanghai Composite were 6 percent lower than the 30-day average, according to data compiled by Bloomberg. Thirty-day volatility in the gauge was at 13.7, compared with this year’s average of 17.2.

The Shanghai Composite trades at 10.8 times reported earnings, the lowest level since at least 1997, according to data compiled by Bloomberg. The index has fallen 11 percent this year, heading for a third straight year of losses, amid estimates the economy will grow at its slowest pace in a more than a decade this year.