SHANGHAI - Stocks on the Chinese mainland fell the most in more than a week on Thursday. The retreat came after Morgan Stanley and Deutsche Bank AG cut their economic growth forecasts for the Asian country on concern a slowdown in the US and Europe will reduce exports.

Anhui Conch Cement Co, China's biggest cement maker, declined the most in nine months on concern that prices for the building material are weakening in the eastern part of the nation. Poly Real Estate Group Co and China Merchants Bank Co dragged down a gauge of banks and developers to its biggest loss in almost two weeks. Laiwu Steel Corp retreated 2.7 percent after first-half profit fell.

"The economic slowdown in China over the next couple of years is something foreseeable as China relies too much on exports and investment and these two drivers cannot sustain growth for long," said Zhang Qi, an analyst at Haitong Securities Co in Shanghai. "I still don't see a big investment opportunity in the stock market."

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, slid 1.6 percent, to 2559.47 at its close, its biggest decline since Aug 8. The CSI 300 Index lost 1.8 percent to 2834.25.

The Shanghai Composite has slid 8.9 percent this year as China's central bank raised interest rates five times and ordered lenders to set aside more cash as deposit reserves 12 times since the start of 2010 to contain inflation that quickened to the fastest pace in three years last month. The gauge is valued at 11.7 times estimated earnings, the lowest since Bloomberg began to track the data in 2006, according to weekly data compiled by Bloomberg.

Anhui Conch slumped 6.2 percent to 23.94 yuan ($3.74), the biggest drop since Nov 17. Gansu Qilianshan Cement Group Co lost 4.2 percent to 15 yuan. Huaxin Cement Co, the Chinese affiliate of Holcim Ltd, retreated 6.8 percent to 26.27 yuan.

"With cement prices in eastern China falling on Thursday, investors may be worrying about whether the company can sustain prices," said Zhu Jixiang, analyst at Capital Securities Corp in Shanghai. "Companies in eastern China could always keep prices stable, even during the slack season, so the price drop may be affecting investors psychologically."

Morgan Stanley cut its estimate for China's 2012 economic growth to 8.7 percent from 9 percent, citing the effects of weaker growth in the US and Europe. Gross domestic product growth will slow to 8.1 percent in the fourth quarter of this year from 9.7 percent in the first quarter, the brokerage said. China's economy may grow less than previously forecast in 2011 and 2012 amid the "shock" of a US and European Union slowdown, according to Deutsche Bank.

The brokerage cut its 2011 GDP growth forecast to 8.9 percent from 9.1 percent and lowered its 2012 GDP growth estimate to 8.3 percent from 8.6 percent, analysts led by Ma Jun wrote in report.

A gauge of financial companies in the CSI 300 slid 1.7 percent. China Merchants Bank fell 2.4 percent to 11.63 yuan. China Minsheng Banking Corp lost 1.8 percent to 5.60 yuan. Huaxia Bank Co, owned by Deutsche Bank, dropped 1.6 percent to 10.39 yuan.

Bad loans at banks will rise to "shockingly high" levels, eroding profits and slowing growth in the world's second-biggest economy, said Vontobel Asset Management Inc's Rajiv Jain, who runs some of this year's best-performing mutual funds.

Bloomberg News