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March 26, 2019

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Local stocks hit by fears of global downturn

By Tracy Li | 00:05 UTC+8 March 26, 2019 | Print Edition

China’s A-share markets closed lower yesterday, with the three major indexes all retreating, as fears of a worldwide economic recession weigh on investors.

The two bourses opened lower, triggered by plunges on major global markets, with the Shanghai Composite Index falling 1.97 percent, or 61.12 points, to finish at 3,043.03.

The smaller Shenzhen Component Index slumped 1.80 percent to 9,701.70 points.

The ChiNext Index, China’s Nasdaq-style board of growth enterprises, was down 1.48 percent to finish at 1,668.84 points.

The combined turnover of the two bourses came to 819.3 billion yuan (US$121.9 billion), up from 801.9 billion yuan the previous trading day.

The non-banking financial sector led the losses.

Lucion, the first domestically-listed venture capital company, slipped by 9.64 percent to close at 25.95 yuan.

Communications and building material companies were also among the big losers.

Zhu Bin, a senior analyst at Southwest Securities, was quoted by Caixin.com as saying that as the European and American economies are gradually showing signs of recession, that will exert a significant impact on the local A-share market.

In March, factory production in Europe contracted at the fastest pace in nearly six years, according to media reports. The United States and Japan also saw a fall in manufacturing output.

Another major concern for investors is the outlook for the world’s largest economy. Last Friday, the spread between the three-month US Treasury bills and the 10-year note went negative for the first time in more than a decade — widely seen as a sign of a looming slowdown.

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