China's Shares Fall To 1 Week-Low, Led By Drugmakers, Developers

China’s stocks fell to the lowest level in a week on concern recent rallies for drugmakers and developers, the best performers among industry groups this past month, have been excessive as the slowing economy hurts profit.

Shandong Dong-E E-Jiao Co. and Poly Real Estate Group Co. slid more than 1 percent, leading health-care and real estate companies to the steepest drop among industry groups today. Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., China’s biggest producer of rare earth, jumped the most in a week after the Economic Information Daily reported the government has started to draft a plan to consolidate the industry.

The Shanghai Composite Index (SHCOMP) lost 0.3 percent to 2,292.88 at the close, after changing directions at least 12 times. The CSI 300 Index (SHSZ300) slid 0.2 percent to 2,552.61. China’s markets will be closed for a holiday on June 22. The Bloomberg China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, jumped 1.8 percent to the highest level since May 16.

“There are some investors who think the bottom for the economy hasn’t been reached yet,” said Mao Sheng, an analyst for Huaxi Securities Co. in Chengdu. “With market liquidity low, it’s difficult for stocks to rise.”

Speculation that a slowdown in China’s economy is deepening and Greece will leave the euro area have dragged the Shanghai index down by 6.8 percent from this year’s high set on March 2. The gauge trades for 9.9 times estimated earnings, compared with the five-year average of 17.8, weekly data compiled by Bloomberg showed.