ADR Report: Shares Lower As China Cuts Growth Target

Date : 03/05/2012 @ 5:26PM
Source : Dow Jones News
Stock : Mechel Pao American Depositary Shares (Each Rep. 1 Common Shares) (MTL)
Quote : 4.97  -0.08 (-1.58%) @ 2:06PM

ADR Report: Shares Lower As China Cuts Growth Target

Mechel PAO (NYSE:MTL)
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International companies trading in New York closed lower Monday, in line with the broader market, as China cut its economic growth target and data showed euro-zone business activity contracted more than initially thought.

The Bank of New York index of ADRs declined 0.8% to 131.30 as resource stocks tumbled after China, a large consumer of natural resources, cut its economic growth target to 7.5% for 2012 after keeping it at 8% for the past eight years.

Mechel OAO (MTL, MTLR.RS) fell 5.6% to $10.56, Rio Tinto PLC (RIO, RIO.LN) dropped 3.9% to $54.23 and BHP Billiton PLC (BBL, BLT.LN) ended down 2.4% at $62.65.

The Latin American index and the emerging markets index lost 1.8% to 381.16 and 1.8% to 312.84, respectively, as Brazil resources companies also fell on news of a China slow down. China is Brazil's biggest trading partner and Brazil's key exports include iron ore.

Vale SA (VALE, VALE5.BR), the world's largest iron ore supplier, traded down 3.7% to $24.74. Steel producer Gerdau SA (GGB, GGBR4.BR) declined 2.2% to $10.36.

The European index lost 0.3% to 120.26 as Italy and Spain both contracted faster in February than in January, suggesting that growth for those countries looks to be a long way off.

Shares of Spanish banks Banco Bilbao Vizcaya Argentaria SA (BBVA, BBVA.MC) fell 1.9% to $8.85 and Banco Santander SA (STD, SAN.MC) lost 2.1% to $8.22.

The Asian index fell 1.4% to 128.53.

Tumbling natural-gas futures are weighing today on the energy sector as natural-gas futures flirted with 10-year lows on expectations that warmer-than-usual weather will persist across much of the U.S. this month. Coal companies took a hit as low natural-gas prices are liable to only hasten the switch of power plants to that fuel instead of coal. Shares of Yanzhou Coal Mining Co. (YZC, K3GD.SG, 600188.SH, 1171.HK) shed 4.5% to $23.37.

-By Corrie Driebusch, Dow Jones Newswires; 212-416-2143; corrie.driebusch@dowjones.com

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