Chinese stocks down for third day on global slowdown worries

Chinese stocks were down for a third day, the longest losing streak in almost two months, as global slowdown concerns hit earnings.

China Life Insurance Co, which was down to a two-month low, announced that its profit might have taken a beating by as much as 50 per cent in 2011. FAW Car Co, passenger car maker with Volkswagen AG, was up 3.6 per cent after the Xinhua News Agency said sales at the German partner surged in China this year. Shipbuilder China CSSC Holdings Ltd led a rally among defence-related stocks on expectations of increased military spending.

According to Wang Zheng, there was no big risk of a sharp slowdown in the economy but there was no big catalyst either that would convince everyone that the economy would pick up strongly soon. Zheng is Shanghai-based chief investment officer at Jingxi Investment Management Co, which manages about $120 million.

Five stocks gained for every four that fell in the Shanghai Composite Index as the gauge swung between gains and losses at least 19 times today. The CSI 300 Index was up 0.2 per cent at 2,626.67. The Bloomberg China-US 55 Index, the measure of the most-traded US-listed Chinese companies, fell 2.3 per cent yesterday in New York.

China cut its 2012 economic growth target to 7.5 per cent on 5 March, down from 8 per cent for the past seven years, as the European debt crisis and sluggish US recovery hit demand for goods from the world's largest exporter.

The Shanghai Composite had gained 9.4 per cent in 2012, following two years of losses, on speculation the central bank would add to an 18 February cut in reserve requirements to halt a slowdown in economic growth. Stocks in the index traded 9.9 times the company's estimated profit, as against a record low of 8.9 times on 6 January, according to weekly data compiled by Bloomberg.