Chinese stocks plunge, economic growth may have peaked

While US and European stock markets finished the first trading day of the week on a relatively flat note, the Chinese stock market plunged again on Monday. From AFP/CNA:

Chinese shares hit their lowest level in more than a year Monday, tumbling 5.07 percent as world markets fell and domestic concerns over property market tightening measures grew, dealers said.

The Shanghai Composite Index, which covers both A and B shares, was down 136.70 points at 2,559.93 on turnover of 88.2 billion yuan (12.9 billion US dollars).

The index hit its lowest closing level since May 4, 2009, when the market sank to 2,559.91...

Premier Wen Jiabao said over the weekend that the government would contain excessive increases in property prices in some cities and curb growth of industries that are over capacity, the official Xinhua News Agency reported.

State media also reported on Monday that China's National Development and Reform Commission was drafting more stringent rules for the property market.

Even as the government contemplates more curbs on the property market, Chinese economic growth may already have peaked. From Bloomberg:

China’s growth may have peaked as developers accelerated construction work ahead of government measures to cool the property market, according to research organization The Conference Board.

A leading economic indicator rose 1.1 percent to 144.5 in March, after a 0.4 percent gain in February, the New York-based organization said today in an e-mailed statement, releasing the measure for the first time...

... Adams said it followed six months of smaller increases and “this one month is not enough to call a new trend from.” He commented in a conference call. China’s growth remains “strong” according to Adams.

Economic reports elsewhere on Monday were relatively positive though.

Reuters reports that US data for May continue to point to growth.

The New York Federal Reserve said its gauge of manufacturing in New York state showed the pace of growth slowed in May, though the jobs index component rose to its highest level in about six years...

The New York Fed's "Empire State" general business conditions index fell to 19.11 in May from 31.86 in April. Economists polled by Reuters had expected a May figure of 30.00. Readings of more than zero show growth. The index has now shown growth for 10 straight months...

U.S. home-builder sentiment rose in May to the highest level in more than 2-1/2 years, boosted by a homebuyer tax credit and a strengthening economy, the National Association of Home Builders said on Monday.

The NAHB/Wells Fargo Housing Market index increased three points to 22, the highest since August 2007, the group said in a statement. It was the second straight month of gains in the index. Overall sentiment, however, remained negative, with a reading below 50 indicating more builders view sales conditions as poor than good.

For Japan, Bloomberg reports that machinery orders rose in March.

Japanese machinery orders advanced for the first time in three months and producer prices fell the least in more than a year, reflecting a sustained recovery in an economy struggling to end deflation.

Orders, an indicator of business investment in three to six months, climbed 5.4 percent in March from February, the Cabinet Office said today in Tokyo. The costs that companies pay for energy and unfinished goods fell 0.2 percent in April from a year earlier, the Bank of Japan said.