Fall in investment dents key index
By Hu Xiaocen |
June 27, 2012, Wednesday
|
Print Edition
Print Edition
SHANGHAI stocks ended lower yesterday for a fifth consecutive day after the Ministry of Commerce announced that inbound investment to China weakened, deepening worries the European debt crisis may further impact China's economy.
The Shanghai Composite Index dipped 0.09 percent to 2,222.07 points. The five-day losing streak was the longest since the six days ended December 15.
The ministry yesterday said inbound investment fell 1.91 percent on an annual basis to US$47.1 billion in the first five months of this year. Investment from the United States edged up 0.29 percent while that from Europe shed 5.06 percent.
"Foreign direct investment used to be a big driver of China's economic growth," Dariusz Kowalczyk, senior economist at the corporate and interment banking division of Credit Agricole SA, said yesterday in Shanghai.
"The eurozone crisis is exacerbating the already sharp slowdown in capital spending."
He noted that foreign direct investment fell between January and May because inflows from seven key eurozone countries fell over 12 percent.
Kowalczyk said China's economic growth may slow to 7 percent in the second and third quarters, threatening the annual target of 7.5 percent.
SAIC Motor Corp fell 0.8 percent to 14.10 yuan (US$2.22), the lowest close since March 28, after an official with the country's economic planning body said the government has no plans to unveil more policies to revive vehicle demand.
Most lenders gained after the People's Bank of China injected 95 billion yuan (US$15 billion) in the money market yesterday via the reserve repurchase of bills.
The Agricultural Bank of China rose 0.4 percent to 2.55 yuan and Hua Xia Bank jumped 1.3 percent to 9.4 yuan. But the Industrial and Commercial Bank of China, the world's biggest lender by market capitalization, shed 0.3 percent to finish at 3.93 yuan.
The Shanghai Composite Index dipped 0.09 percent to 2,222.07 points. The five-day losing streak was the longest since the six days ended December 15.
The ministry yesterday said inbound investment fell 1.91 percent on an annual basis to US$47.1 billion in the first five months of this year. Investment from the United States edged up 0.29 percent while that from Europe shed 5.06 percent.
"Foreign direct investment used to be a big driver of China's economic growth," Dariusz Kowalczyk, senior economist at the corporate and interment banking division of Credit Agricole SA, said yesterday in Shanghai.
"The eurozone crisis is exacerbating the already sharp slowdown in capital spending."
He noted that foreign direct investment fell between January and May because inflows from seven key eurozone countries fell over 12 percent.
Kowalczyk said China's economic growth may slow to 7 percent in the second and third quarters, threatening the annual target of 7.5 percent.
SAIC Motor Corp fell 0.8 percent to 14.10 yuan (US$2.22), the lowest close since March 28, after an official with the country's economic planning body said the government has no plans to unveil more policies to revive vehicle demand.
Most lenders gained after the People's Bank of China injected 95 billion yuan (US$15 billion) in the money market yesterday via the reserve repurchase of bills.
The Agricultural Bank of China rose 0.4 percent to 2.55 yuan and Hua Xia Bank jumped 1.3 percent to 9.4 yuan. But the Industrial and Commercial Bank of China, the world's biggest lender by market capitalization, shed 0.3 percent to finish at 3.93 yuan.
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