China's Stocks Decline for Fourth Day

China's stocks fell for a fourth day, driving the benchmark index to its biggest weekly decline in seven weeks, after a gauge of manufacturing shrank for the first time since 2005., Bloomberg 8/1/2008 6:56:38 AM

Baoshan Iron & Steel Co., the nation's biggest steelmaker, tumbled to the lowest level since December 2006. The Purchasing Managers' Index fell in July as export demand faltered and factories closed to clear the air before next week's Olympic Games. Aluminum Corp. of China Ltd., the country's largest producer of the metal, dropped after it cut alumina prices.

The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, lost 47.30, or 1.7 percent, to 2,757.91 as of 1:33 p.m. local time. The gauge has dropped 6.2 percent this week, the biggest weekly decline since the five days to June 13.

The CSI 300 has lost 48 percent this year, the worst performer among the world's top 20 benchmark indexes, on concern rising fuel prices and accelerating inflation will hurt earnings.

Regulators are restricting approvals for share sales to try to arrest the decline, two people familiar with the matter said. The China Securities Regulatory Commission is delaying the issuance of written approval documents, the final regulatory stage, to companies preparing initial public offerings, the people said. They declined to be identified because they aren't authorized to speak publicly on the matter.

Nervousness ahead of the Olympics, which start a week today, may have added to the urgency of supporting the stock market, said Leslie Phang, Singapore-based head of investment at the private-client unit of Schroders Plc, which oversees about $260 billion globally.

The central bank this year ordered lenders to set aside a record amount in reserves to tame rising consumer prices after increasing interest rates six times in 2007. Inflation climbed to 7.9 percent in the first half of this year, compared with 4.8 percent for all of 2007, government figures show.

China's economic expansion slowed for the fourth straight quarter in the three months through June as U.S. demand for exports faltered.

China Shenhua Energy Co., the nation's largest coal producer, and China Coal Energy Co. retreated on concern demand for the fuel will drop. Shenhua fell 3.4 percent to 30.71 yuan. China Coal, the nation's second-largest coal producer by sales, lost 4 percent, to 13.17 yuan. Shanxi Coking Co., the largest publicly traded coke producer in China, declined 4.1 percent to 9.85 yuan.

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, fell 1.7 percent to 2,729.59. The Shenzhen Composite Index lost 1.6 percent to 814.34.

The following stocks rose or fell and the stock symbols are in brackets after companies' names.

Textile and garment manufacturers: China will raise tax rebates on exports of textiles and garments to 13 percent from 11 percent starting today, the State Administration of Taxation said yesterday.