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Cyclical counters lead Shanghai index lower
By Ye Zhen |
July 18, 2013, Thursday
|
Online Edition
Online Edition
SHANGHAI stocks extended losses for a second day as cyclical shares retreated due to a shift in policy expectation, overshadowing gains made by small-cap firms that are expected to benefit from China's economic reform.
The key Shanghai Composite Index declined 21.53 points, or 1.05 percent, to settle at 2,023.40. Daily turnover was 76.6 billion yuan (US$12.6 billion).
"The market oscillated and ended lower today with polarized performances between cyclical shares and growth stocks because investors have reduced expectation over massive stimuli and increasingly bet on restructuring," said market analyst Yang Liu.
Cyclical shares, the performance of which is closely related to economic conditions, retreated after Finance Minster Lou Jiwei said yesterday that China is unlikely to introduce a large fiscal stimulus this year.
Coal producers led the market drop after data showed the Bohai-Rim Steam-Coal Price Index, a gauge of steam coal price at six ports, fell 1.5 percent to 583 yuan a ton, the biggest decline within the year.
The Ministry of Finance yesterday pledged to promote a resource-tax reform by taxing coal production based on value instead of volume, which may increase the taxation on the sector and further squeeze its profit margin.
Shanxi Lu'an Environmental Energy Development Co lost 3.8 percent to 11.47 yuan. Shanxi Lanhua Sci-Tech Venture Co fell 3.1 percent to 12.20 yuan.
Media firms rose after China announced it would reduce administrative barriers for the sector. Zhe Jiang Daily Media Group Co rose 5.4 percent to 31.49 yuan. Shanghai Xinhua Media Co gained 3.5 percent to 5.67 yuan.
The key Shanghai Composite Index declined 21.53 points, or 1.05 percent, to settle at 2,023.40. Daily turnover was 76.6 billion yuan (US$12.6 billion).
"The market oscillated and ended lower today with polarized performances between cyclical shares and growth stocks because investors have reduced expectation over massive stimuli and increasingly bet on restructuring," said market analyst Yang Liu.
Cyclical shares, the performance of which is closely related to economic conditions, retreated after Finance Minster Lou Jiwei said yesterday that China is unlikely to introduce a large fiscal stimulus this year.
Coal producers led the market drop after data showed the Bohai-Rim Steam-Coal Price Index, a gauge of steam coal price at six ports, fell 1.5 percent to 583 yuan a ton, the biggest decline within the year.
The Ministry of Finance yesterday pledged to promote a resource-tax reform by taxing coal production based on value instead of volume, which may increase the taxation on the sector and further squeeze its profit margin.
Shanxi Lu'an Environmental Energy Development Co lost 3.8 percent to 11.47 yuan. Shanxi Lanhua Sci-Tech Venture Co fell 3.1 percent to 12.20 yuan.
Media firms rose after China announced it would reduce administrative barriers for the sector. Zhe Jiang Daily Media Group Co rose 5.4 percent to 31.49 yuan. Shanghai Xinhua Media Co gained 3.5 percent to 5.67 yuan.
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