Jan. 14 (Bloomberg) -- Chinese stocks in the U.S. tumbled, trimming their advance in the week, as the worsening debt crisis in Europe erodes the outlook for Asia’s fastest growing economy and diminishes the appeal of the nation’s assets.
The Bloomberg China-US 55 Index slumped 1.3 percent to 99.02 as of 12:57 p.m. New York time, reducing its gain this week to 0.5 percent. China Southern Airlines Co. plummeted the most in two months, trading at a discount to shares in Hong Kong for the first time this year. Trina Solar Ltd. led declines among peers, trimming this week’s advance, amid concern about the industry’s overcapacity. Video websites Tudou Holdings Ltd. and Youku Inc. fell on rising competition.
China’s economy probably slowed for the fourth quarter in the last three months of 2011, according to the median forecast of economists surveyed by Bloomberg before data released next week. Policy makers banks’ reserve-requirement ratios last month for the first time since 2008 to spur lending and have kept key interest rates on hold since July.
“We’re looking to China to do more in terms of monetary easing,” Lim Say Boon, chief investment officer of DBS Group Holding Ltd.’s wealth management business in Singapore, said in an interview with Bloomberg Television. “The big story is the risk-on and risk-off that we are now watching being played out, particularly in the euro area.”
The Bloomberg China-US 55 index of the most-traded Chinese stocks in New York also dropped on speculation some euro-area nation’s credit ratings will be downgraded by Standard & Poor’s. France will lose its top AAA rating for the first time, Agence France-Presse said, citing an unidentified government official. Top-rated Austria will also be cut, a person familiar with the situation said, declining to be identified.
China Southern
The Shanghai Composite Index declined 1.3 percent, the most in a week, to 2,244.58 on Jan. 13. The Standard & Poor’s 500 Index of U.S. stocks slid 1 percent to 1,282.74.
American depositary receipts of China Southern, Asia’s biggest carrier by passenger numbers, tumbled 6.6 percent to $27.75, the most since Nov. 9. The ADRs, each representing 50 common shares, traded at prices 0.4 percent lower than the company’s Hong Kong-listed shares, the first day they have offered a discount this year.
Passenger traffic for China Southern rose 5.3 percent in 2011 to 80.5 million, the Xinhua News Agency reported on Jan. 1, citing an unidentified company spokesman. That was less than the 15.4 percent growth in 2010.
China Southern “still stands a better chance to lead its peers in 2012 performance” even if the industry’s growth slows, Bocom International Holdings said in a report on Jan. 13.
Solar Rally ‘Overdone’
Trina Solar sank 7.5 percent to $9.55, reducing its gains this week to 41 percent. The company jumped 29 percent on Jan. 11 following reports that China plans to develop three gigawatts of solar capacity this year while Germany installed three gigawatts of solar panels in December, the most in a single month.
The solar rally “feels overdone” as overcapacity remains major problem, Pavel Molchanov, an analyst at Raymond James & Associates Inc. wrote in a research note yesterday.
Suntech Power Holdings Co., the biggest solar-panel maker in China, declined 3.5 percent to $3.05.
The iShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., retreated 0.8 percent yesterday to $36.56. The yuan gained 0.2 percent to 6.3066 a dollar, according to the China Foreign Exchange Trade System.
China, the world’s second-largest economy, expanded 9.1 percent in the third quarter from a year earlier, down from 9.5 percent growth in the second quarter. Growth probably slowed to 8.7 percent in the last three months, according to the median forecast of 27 economists in a Bloomberg survey. The government is scheduled to report the figures on Jan. 17.