China stocks drop as yuan falls further; airlines, property in the crosshairs
SHANGHAI Aug 12 (Reuters) - China stocks fell on Wednesday as the central bank let the yuan currency slide sharply for a second day and data showed further deterioration in the economy.
Investors continued to dump airline shares on fears that a weaker yuan would translate into higher fuel bills and hurt sectors with heavy foreign debt.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 1.2 percent to 4,016.13 points, while the Shanghai Composite Index lost 1.0 percent to 3,886.32.
China's yuan hit a four-year low on Wednesday, falling for a second day after authorities devalued it on Tuesday.
The move has sparked fears of a global currency war and accusations that Beijing was giving an unfair advantage to its struggling exporters.
China Eastern and China Southern both slumped nearly 6 percent, while rival Air China lost 4.4 percent.
Real estate shares also tumbled, after Credit Suisse cautioned investors against the risks of capital outflows, and called the property sector the biggest loser in the process.
Data on Wednesday showed property investment growth slowed to 4.3 percent in the first seven months of the year, the weakest pace since March 2009, despite a pick-up in home sales. New construction fell 16.8 percent, further dampening demand for materials from cement and steel to glass and furniture.
Growth in China's factory output, fixed-asset investment and retail sales were all weaker than expected in July, adding pressure on Beijing to roll out more measures to support the struggling economy.
But China-listed textile and garment makers, many export-oriented, extended gains, emerging as an obvious winner as investors hunt for companies that benefit the most from a weaker yuan.
Luthai Textile Co, Shanghai Metersbonwe Fashion and Accessories Co and Hunan Mendale Hometextile Co all surged by their 10 percent daily limit. (Reporting by Samuel Shen and Pete Sweeney; Editing by Kim Coghill)
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