Main­land stocks fall to 2-month low

In­vestor sen­ti­ment about prospects for the Chi­nese econ­omy weighs heav­ily on bourses

China Daily (Canada) - - BUSINESS - By LI XIANG lix­i­ang@chi­nadaily.com.cn

Chi­nese main­land stocks on Wed­nes­day de­clined to their low­est level in two months, amid weak in­vestor sen­ti­ment about prospects for the Chi­nese econ­omy.

The bench­mark Shang­hai Com­pos­ite In­dex fell 1.27 per­cent to close at 2807.51. It tum­bled more than 2 per­cent dur­ing in­tra­day trad­ing, but man­aged to re­coup some of the loss as big-cap fi­nan­cial stocks ral­lied to­ward the mar­ket close.

Tech­nol­ogy stocks, power equip­ment man­u­fac­tur­ers, ship­build­ing and ma­te­ri­als shares led the de­cline.

ChiNext In­dex, which tracks the stocks of high-tech star­tups traded in Shen­zhen, tum­bled by 2.93 per­cent to close at 2020.48.

An­a­lysts said that Wed­nes­day’s de­cline could re­flect frag­ile in­vestor sen­ti­ment about prospects for the econ­omy af­ter key data for April re­leased over the week­end showed weaker than ex­pected growth in in­dus­trial pro­duc­tion, fixed-as­set in­vest­ment and re­tail sales.

“April data will em­bolden the China bears to start de­mand­ing their pound of flesh again as they ar­gue that the re­vival in March was too good to be true.

Such is the whip­saw­ing sen­ti­ment on China’s out­look,” said Jeremy Steven, Asia Econ­o­mist at Stan­dard Bank.

The bench­mark Shang­hai in­dex has de­clined 21 per­cent this year, mak­ing it the worst per­former among the 93 bench­marks tracked by Bloomberg.

Guo Yan­hong, a strate­gist at Founder Se­cu­ri­ties Co said that Wed­nes­day’s mar­ket slump also re­flected the ris­ing con­fu­sion of in­vestors over Bei­jing’s pol­icy di­rec­tion af­ter a re­cent ar­ti­cle by the Peo­ple’s Daily, cit­ing an un­named au­thor­i­ta­tive per­son, stressed an “L-shape” eco­nomic re­cov­ery path and crit­i­cized us­ing lever­age and mas­sive credit eas­ing to stim­u­late growth.

“Some in­vestors in­ter­preted it as a shift of Bei­jing’s macroe­co­nomic pol­icy. But some thought it was too dras­tic and are still di­gest­ing the ar­ti­cle,” Guo said.

The stock sell­off on Wed­nes­day also came af­ter me­dia re­ports sug­gested that the se­cu­ri­ties reg­u­la­tor is mulling new rules to curb the trad­ing lever­age of the hedge funds, sub­sidiaries of mu­tual funds and as­set man­age­ment firms.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.