An investor watches share price movements at a brokerage in Fuyang, Anhui province. The Shanghai Composite Index slid 2.92 percent to 2677.65 at the 3 pm close on Thursday, the lowest since Sept 30. An Xin / for China Daily

SHANGHAI - Stocks on the Chinese mainland fell to the lowest level in four months on concern that faster-than-estimated economic growth will spur a rebound in inflation, increasing pressure on the government to raise interest rates.

Jiangxi Copper Co dropped 5.88 percent, leading declines for metal producers, on speculation that policy tightening will curb demand for raw materials.

Poly Real Estate Group Co fell to the lowest this year after the Securities Times reported Shanghai may impose a tax on homes based on size.

Shanghai Pudong Development Bank Co and Industrial Bank Co slid at least 2.65 percent. Government reports showed the economy grew 9.8 percent in the fourth quarter and December inflation was 4.6 percent.

"The market expectation is that January inflation will be at a high level again and interest-rate increases are inevitable," said Zhang Ling, general manager of Shanghai River Fund Management Co. "Even though stocks are cheap, they may decline further before reaching a bottom."

The Shanghai Composite Index slid 2.92 percent to 2677.65 at the 3 pm close on Thursday, the lowest since Sept 30. The CSI 300 Index slumped 3.29 percent to 2944.71.

Jiangxi Copper dropped 5.88 percent to 36.96 yuan ($5.61). Western Mining Co slid 6.01 percent to 16.73 yuan.

China's December inflation rate of 4.6 percent matched the median expectation of economists in a Bloomberg News survey.

November CPI growth of 5.1 percent exceeded the 4.7 percent expectation of economists and was the fastest pace in 28 months.

Consumer price growth may have quickened in January, with the inflation rate rising to as high as 6 percent, said Shen Jianguang, an economist at Mizuho Securities in Hong Kong. The People's Bank of China, the nation's central bank, may boost interest rates as early as this month, he said. The bank increased borrowing costs in October and December.

Consumer prices are expected to be at a "high level" in the first quarter because of increasing imported inflationary pressure and expectations of price rises, the National Development and Reform Commission said in a statement on Thursday.

China Southern Airlines Co fell 7.48 percent to 8.41 yuan on Thursday. China Eastern Airlines Corp lost 5.32 percent to 6.23 yuan.

China's banks extended more than 1 trillion yuan of new loans by Wednesday, the 21st Century Business Herald reported on Thursday, citing an unidentified person familiar with the situation. China Development Bank Corp ordered its branches on Tuesday to halt lending for the remainder of the month, the newspaper reported, citing an unidentified person close to the bank.

Industrial Bank, part-owned by a unit of HSBC Holdings Plc, fell 3.14 percent to 25.26 yuan.

Poly Real Estate, China's second-largest developer by market value, tumbled 6.33 percent to 13.03 yuan, the lowest since Dec 31. China Vanke Co, the nation's biggest listed property developer, lost 4.68 percent to 8.14 yuan.

Bloomberg News