China Stocks Plunge the Most Since June; Mining Companies Slump

By Zhang Shidong

Nov. 18 (Bloomberg) -- China’s stocks plunged the most since June, from a one-month high, led by commodity producers after metal prices retreated. More than 120 equities on the benchmark index slumped by the daily limit.

Zijin Mining Group Co., China’s largest gold producer, Aluminum Corp. of China Ltd., the largest maker of the light metal, and Jiangxi Copper Co., No. 2 in its industry, all fell by the maximum 10 percent. Datong Coal Industry Co. dropped by the limit as oil sank yesterday to the lowest since January 2007.

The CSI 300 Index, which tracks yuan-denominated A shares listed on China’s two exchanges, declined 147.41, or 7.4 percent, to 1,839.82 at the close, ending a four-day, 12 percent advance. The decline is the biggest since June 10.

“Profit-taking and weakening regional markets have taken their toll on us today after a couple of days of rallies,” said Xu Lirong, a fund manager at Franklin Templeton Sealand Fund Management in Shanghai, which manages the equivalent of $2.56 billion. “Some investors are simply selling on the rebound to lock in profits.”

China Eastern Airlines Corp., the nation’s third-largest carrier, advanced by the 10 percent limit for a second day after saying that an application for government aid was in the “final stage.”

The benchmark index remains 13 percent higher than the two- year low set on Nov. 4, days before the government announced a 4 trillion yuan ($586 billion) plan to boost economic growth. The measure is down 66 percent this year on concern demand for Chinese products will sink as economies worldwide slide into recession.

To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net