2014 Top Stocks Market, Best Stocks Investment In 2014, Top Stocks For 2014: Baidu Sinks as Index Falls Most Since September: China Overnight

Chinese stocks trading in the U.S.posted the biggest weekly drop in three months as Baidu (BIDU) Inc. andYanzhou Coal Mining Co. (YZC) declined on concern the economicslowdown in the world��s second-largest economy is worsening.

The Bloomberg China-US 55 Index of the most-traded Chinesestocks lost 5.1 percent last week to 94.19 on Dec. 16, thebiggest five-day slump since September. Baidu, owner of thecountry��s biggest search engine, has slid 12.3 percent sinceDec. 9 after Credit Suisse AG cut its earnings estimates for thecompany. Yanzhou, China��s fourth largest coal producer, fell 9.6percent last week to $20.84, representing a 3-cent premium overthe shares trading in Hong Kong.

Speculation is growing that policy makers may cut lenders��reserve requirement ratio for a second time since November afterthe money supply grew the least in a decade last month andmanufacturing contracted in December. Fitch Ratings put creditratings for European nations, including France, Spain and Italy,under review for a downgrade, underscoring the need for China torevive domestic demand as Europe��s debt crisis hurts exports.

��They are probably slowing down a bit too much perhaps fortheir own taste, so they are easing monetary policy,�� Angel Gurria, secretary general of the Organization for EconomicCooperation and Development, said in an interview on BloombergTelevision. ��External demand around the world is dropping.China is going to have to do more�� to boost domestic demand, hesaid.

Jobs, Inflation

A survey of China��s business confidence is scheduled forrelease on Dec. 22. In Hong Kong, the government is slated torelease unemployment and inflation reports this week.

The Shanghai Composite Index of domestic shares fell 3.9percent last week and reached the lowest close since March 2009.The index rose 2 percent on Dec. 16 amid the speculation centralbankers will lower reserve requirements.

The Hang Seng China Enterprises Index (HSCEI), which tracks Chinesecompanies tr! ading in Hong Kong, fell 2 percent last week whilethe Standard & Poor��s 500 Index of U.S. shares lost 2.8 percent.The IShares FTSE China 25 Index Fund (FXI), the biggest Chineseexchange-traded fund in the U.S., tumbled 4.9 percent to $34.53.

21Vianet Group Inc., an Internet data center servicesprovider, jumped 9.7 percent on Dec. 16 to $9.58. The companysaid that it has exercised its option to acquire the remaining49 percent equity interest in two companies that provide managednetwork services.

Sina Corp, owner of the Twitter-like Weibo service in China,advanced 4.3 percent on Dec. 16 after earlier falling as much as11 percent on a move by Beijing��s municipal government totighten regulation on microblog users.

Internet Rules

The new rules ban users from setting up accounts withaliases and sending public messages containing state secrets orinformation that could harm national security. Sina said in astatement that it��s ��evaluating the impact�� the changes mayhave on the Weibo operation.

Chinese officials have pressured microblog services tostrengthen supervision after a fatal rail crash in July sparkedan outburst of criticism of the government on the Internet.Microblogs, which are used to publish short messages on theInternet, have at least 300 million registered users in China.Sina��s Weibo accounted for 66 percent of the market in August,according to a Sept. 15 report by BOCOM International.

The news isn��t the ��worst case scenario�� for Sina asinvestors had already anticipated the tightening of governmentregulations, according to Adam Krejcik, an analyst at RothCapital Partners.

Tencent, Sohu

��Following months of speculation, we believe Sina��smanagement is relatively prepared and also believe the actualreporting of this news, versus numerous rumors, is better forthe market,�� Krejcik wrote in a note to clients. ��We do notbelieve this signals the end of Weibo in China.��

Sina��s shares lost 11 percent last week, extending itsdecline ! this yea r to 20 percent.

Tencent Holdings Ltd. (700), based in Shenzhen, is the second-biggest operator of microblogs with a 25 percent share,according to BOCOM International. Beijing-based Sohu.com Inc. (SOHU),owner of the country��s fifth-most visited website, also offerssimilar services. Tencent rose 0.9 percent on Dec. 16 to $19.33in New York, trimming its weekly decline to 0.7 percent. Sohuadded 3.9 percent to $48.18, reducing the drop for the week to8.1 percent.

Spreadtrum Communications Inc. (SPRD) rose 3.7 percent on Dec. 16after the semiconductor company said it will buy back up to $50million in shares.

FDI Decline

Youku.com Inc., (YOKU) China��s biggest online-video website,gained 5.1 percent on Dec. 16 to $18.05. The company filed acopyright infringement lawsuit against rival Tudou Holdings Ltd.at the People��s Court in Shanghai, Youku said in an e-mailedstatement. Tudou declined 1.2 percent to $11.12.

Baidu fell to a two-month low after Credit Suisse cut itsearnings estimates for the company on Dec. 13, citing lowerprices the company charged advertisers on search results.

China��s domestic bourse has lost 21 percent this year,following a 14 percent decline in 2010, as policy makers raisedborrowing costs to combat inflation and took measures to curbhousing price increases. The Shanghai Composite Index (SHCOMP) is tradingat 10.7 times forecast earnings in the next 12 months, comparedwith 13.4 in India, 4.8 in Russia and 10 in Brazil.

Reports last week show that the slowdown in the world��ssecond-biggest economy is deepening. Foreign direct investmentdropped for the first time since 2009. The Conference Board��sleading index for China, which captures prospects over the nextsix months, fell in October.

Yuan Gains

The central bank reduced reserve requirements for lenderson Nov. 30 for the first time since 2008 to temper the slowdown.The central bank will cut reserve requirements once more thisyear and five times in 2012, Li Wei and Stephen! Green,e conomists at Standard Chartered Plc., wrote in a note toclients this week.

The Chinese yuan gained 0.4 percent on Dec. 16 to 6.3484per dollar in Shanghai, according to the China Foreign ExchangeTrade System.

Related Articles: