China’s stocks drop on earnings, European concerns

China’s stocks fell, capping the benchmark index’s biggest weekly loss in three months, as concern intensified slowing economic growth is hurting earnings and European manufacturing weakened.

China United Network Communications Ltd. (600050), which controls the nation’s second-largest cell phone operator, lost 1.3 percent after the company reported profit that trailed analyst estimates. Agricultural Bank of China Ltd. fell 0.4 percent after the lender posted its first quarterly profit drop in two years. Developers China Vanke Co. and Poly Real Estate Group Co. slid at least 1.3 percent after the Economic Information Daily said the nation may expand property tax trials.

“The prospect of negative earnings in the first quarter hasn’t been priced in yet,” said Wang Weijun, an analyst at Zheshang Securities Co. in Shanghai. “Bad data from Europe may also change investors’ risk appetite.”

The Shanghai Composite Index (SHCOMP) dropped 26.23 points, or 1.1 percent, to 2,349.54 at the close, the lowest level since Feb. 14. The CSI 300 Index (SHSZ300) declined 1.2 percent to 2,552.94. The Bloomberg China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, retreated 0.8 percent in New York yesterday.