Shanghai shares end the past week lower
Commodity stocks dragged down Chinese mainland major indexes Friday, with Shanghai shares ending last week lower.
Market sentiment was in part dampened by a slew of disappointing data that showed China’s economy is likely to lose some momentum.
Fixed-assets investment grew 7.8 percent yearon-year in the first eight months of this year, marking the slowest pace in about 18 years.
The benchmark Shanghai Composite Index lost 0.53 percent to close at 3,353.62 points on Friday. The smaller Shenzhen Component Index closed down 0.07 percent at 11,063.1 points.
The combined turnover on the two bourses shrank to 565.5 billion yuan ($86.5 billion) from 586.3 billion yuan the previous trading day.
Over the past week, the CSI300 index rose 0.1 percent. The Shanghai index lost 0.3 percent.
Having seen a strong rally this year thanks to the country’s economic recovery, cyclical stocks were under selling pressure.
Commodity shares including nonferrous metals, steel and coal led the day’s losses, with an index tracking raw materials falling 1.7 percent but still rising about 31 percent so far this year. For instance, Shanxi Xishan Coal and Electricity Power fell 5.98 percent at 10.84 yuan per share Friday.
Some analysts said that the sell-off is overdone, as major resources companies are expected to continue benefitting from China’s tougher rules on pollution.
The A shares will gain momentum in the long run, while investors’ profit-taking may put some pressure on the market in the short term, according to Guotai Junan Securities.
Ma Wenyu, a strategist at Shanxi Securities, suggested in a Reuters report that investors should seek bargains in undervalued stocks from sectors like steel, rare earth and aluminum.
Weakness in resources shares was offset by strength in real estate where major players saw their shares jump Friday. Wolong Real Estate Group, for instance, closed up 7.41 percent.
An index that tracks property shares advanced 6.2 percent over the past week, supported by data showing performance in the sector snapped back last month despite government curbs.