China’s stocks fell to a 13-month low as slumping industrial companies’ profits increased concern the economic slowdown is deepening.
The Shanghai Composite Index dropped 0.5 percent to 2,735.56 at the close, extending Tuesday’s 6.4 percent plunge. Airlines and power producers led declines after industrial profits slumped 4.7 percent last month and analysts said a weaker yuan could further hurt earnings of companies with dollar debt. The benchmark gauge pared a loss of as much as 4.1 percent after PetroChina Co., long considered a favorite holding of state-linked rescue funds, jumped the most in three weeks. Net buying of Shanghai shares through the Hong Kong exchange link was poised for the highest daily total since September.
Slowing Chinese economic growth is hurting the earnings of domestic companies as well as global firms, with Apple Inc. forecasting a sales decline for the first time in more than a decade. Data on Wednesday showed industrial profits fell for a seventh month in December, extending a record streak of declines. Strategists and technical analysts point to the growth slowdown as the reason why the Shanghai Composite may keep falling until it levels off around the 2,500 level.