China markets drop to lowest since 2009

China’s stocks fell, dragging the benchmark index down for the sixth time in seven days, as liquor shares extended yesterday’s rout on concern demand will weaken.

Kweichow Moutai dropped for a third day, pushing losses for a gauge of consumer staples producers over the past month to 20 per cent after excessive levels of plasticiser were found in JiuGuiJiu Co. products. Chengdu B-Ray Media Co. plunged 10 per cent, sending a gauge of small-company stocks to the lowest level since March 2009. Ping An Insurance (Group) rose 1 per cent after Haitong Securities recommended that investors buy insurance stocks for next year.

The Shanghai Composite Index slipped 0.4 per cent to 1,951.85 at the 11:30 a.m. break, heading for the lowest level since Jan. 15, 2009. The CSI 300 Index slid 0.2 per cent to 2,105.73 while the Hang Seng China Enterprises Index fell 0.2 per cent. The Bloomberg China-US 55 Index lost 0.9 per cent.

“Investors have kind of given up for this year,” Zhang Haidong, analyst at Tebon Securities Co. analyst, said by telephone in Shanghai. “The stock market hasn’t reached a bottom yet. Investors are concerned that demand for high-end products like liquor will suffer.”

Trading volumes in the Shanghai Composite were 6 per cent lower than the 30-day average, according to data compiled by Bloomberg. Thirty-day volatility in the gauge was at 13.7, compared with this year’s average of 17.2.

The Shanghai Composite trades at 10.8 times reported earnings, the lowest level since at least 1997, according to data compiled by Bloomberg. The index has fallen 11 per cent this year, heading for a third straight year of losses, amid estimates the economy will grow at its slowest pace in a more than a decade this year.