Index dips as Fed may cut program
Print Edition
SHANGHAI stocks dipped yesterday as concerns over a likely cut in the US central bank’s stimulus program overshadowed a robust rebound in China’s manufacturing sector.
The Shanghai Composite Index fell 0.28 percent to 2,067.12 points.
Asian stock markets fell as the minutes of the US Federal Reserve’s last meeting indicated its policymakers were inclined to slash the US$85 billion monthly asset purchases.
“It’s very likely the Fed would start to wind down its bond-buying program as early as September as policymakers believed the country’s job market has significantly improved,” CITIC Securities said in a note yesterday.
“This might accelerate the capital outflow from the A-share market in late August and thus sway market sentiment,” it said.
Meanwhile the HSBC’s flash China Purchasing Managers’ Index, the earliest indicator of manufacturing activity at private and export-oriented firms, rose in August to 50.1 from the final figure of 47.7 in July, HSBC Holdings PLC said yesterday.
A reading of 50 or higher generally indicates expansion.
“The sharp rebound in the flash PMI confirms the economy has stabilized in the short term and downside risks for the second half of the year have declined,” said Zhang Zhiwei, chief China economist at Nomura in Hong Kong.
Shanxi Lu’an Environmental Energy Development Co fell 1.43 percent to 13.10 yuan. Wintime Energy Co lost 2.1 percent to 6.86 yuan. Datong Coal Industry Co shed 2.3 percent to 6.67 yuan. Inner Mongolia Baotou Steel Rare-earth (Group) Hi-tech Co declined 3 percent to close at 29.20 yuan.
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