Mainland stocks drop due to sales concern

Most stocks on the Chinese mainland fell after the nation's biggest machinery maker said it may cut its sales forecast for 2012 and plunging residential land sales fueled concern the economic slowdown will worsen.

Sany Heavy Industry Co led a drop for construction equipment stocks after saying a weak market for excavators may lead to a sales shortfall. Jiangxi Copper Co, the largest producer of the metal, retreated the most in three weeks after Phillip Securities (HK) Ltd said its growth will slow substantially. China XD Electric Co surged 9.9 percent on General Electric Co's purchase of a stake in the nation's biggest maker of electricity transmission equipment.

"The risk of economic fundamentals can't be ignored and the road to the recovery might be bumpy," said Li Jun, a strategist at Central China Securities Co in Shanghai. "The property market will continue to be a major drag on the economy."

The Shanghai Composite Index fell 3.06 points, or 0.1 percent, to 2,448.88 at the close, with 458 stocks dropping and 420 gaining. The CSI 300 Index lost 0.3 percent to 2,709.12.

China's GDP grew 8.1 percent in the first quarter, the slowest pace in more than two years, as the housing market cooled and export growth slowed.

A total of 60,000 square meters of residential land were sold in 20 major Chinese cities from April 30 to Sunday, a drop of 92 percent from the previous week, Soufun Holdings Ltd said on Monday.

"My feeling is the news is going to continue to worsen, and markets are more likely to go down than go up," said Michael Shaoul, chairman of Marketfield Asset Management in New York.