September 22, 2011 (Chinavestor) China stocks fell apart on both key Asian markets on Thursday. The Hang Seng Index (INDEXHANGSENG:.HSI) tumbled 912.2 points or 5.1%, the second largest percentage drop in 52 weeks, after the FED admitted that U.S. economic recovery will be slower and more gradual than initially thought. Investors sold off stocks in Shanghai as well after manufacturing and housing data pointed to a slowing economic growth in the world's second largest economy. The Shanghai Composite Index (SHA:000001) fell 69.9 points or 2.9% for the day. China Eastern Airlines (HKG:0670) and Yanzhou Coal Mining (HKG:1171) were among Chinese stocks that fell the hardest in Hong Kong. But the decline was universal, each and every component of the Hang Seng Index (INDEXHANGSENG:.HSI) fell. Jiangxi Copper (HKG:0358) tumbled 12.3% as demand for the metal softens while commodity prices crumble. Zijin Mining (HKG:2899), China's largest gold miner, fell on the same principle.
There was a similarly broad sell-off on the Mainland. Each and every stock among the 50 largest listed companies of the Shanghai Composite index (SHA:000001) fell for the day. Besides resource stocks, real estate were among the weakest sectors after a Credit Suisse report suggested funding may be difficult for the sector going ahead. A report released earlier the week confirmed that property prices in the 70 largest cities in the country rose, prompting speculations that the government will tighten control of the sector. Poly Real Estate (SHA:600048) collapsed and fell 11.54% while China Vanke (SHE:200002), the largest property developer in China, dove 8.45%.
Stocks that weathered the storm relatively well included China Life Insurance (HKG:2628), China Mobile (HKG:0941) and Petrrochina Co. Ltd. (HKG:0857). Had it not been for these index heavy weights outperforming the broad market, the Hang Seng Index (INDEXHANGSENG:.HSI) as well as the Hang Seng China Enterprises Index (INDEXHANGSENG:.HSCE) would have fallen at a record speed.