Index falls again amid bleak news on growth
By Hu Xiaocen |
May 26, 2012, Saturday
|
Print Edition
Print Edition
SHANGHAI stocks yesterday fell for the third straight day, as waning credit demand and contracting manufacturing overshadowed the government's investment stimulus to maintain the nation's economic growth.
The Shanghai Composite Index fell 0.74 percent yesterday to 2,333.55 points, a six-week low. It lost 0.5 percent this week, a third week of declines.
"Companies' profitability cannot cover lending cost in general, according to data in the first quarter. Hence there is weak momentum for business expansion," Ha Jiming, managing director of investment banking at Goldman Sachs, said in Shanghai yesterday.
Market sentiment took a hit due to a series of news. HSBC flash Purchasing Managers' Index dropped to 48.7 in May, indicating a seventh straight month of contraction in manufacturing activities. Market watchers said growth in new loans this month went further south, after 21 Century Business Herald reported the country's four biggest lenders shed both lending and deposit. Meanwhile, the World Bank cautioned that China's slowdown is hurting growth in East Asia.
The Industrial and Commercial Bank of China and China Construction Bank both shed 0.2 percent to close at 4.18 yuan (66 US cents) and 4.48 yuan, respectively.
Premier Wen Jiabao said during a visit to Jiangsu Province this week that priority will be given to maintaining economic growth.
Cement producers gained on hopes new projects will boost demand for their products. Anhui Conch Cement Co edged up by 0.2 percent to close at 16.89 yuan.
The Shanghai Composite Index fell 0.74 percent yesterday to 2,333.55 points, a six-week low. It lost 0.5 percent this week, a third week of declines.
"Companies' profitability cannot cover lending cost in general, according to data in the first quarter. Hence there is weak momentum for business expansion," Ha Jiming, managing director of investment banking at Goldman Sachs, said in Shanghai yesterday.
Market sentiment took a hit due to a series of news. HSBC flash Purchasing Managers' Index dropped to 48.7 in May, indicating a seventh straight month of contraction in manufacturing activities. Market watchers said growth in new loans this month went further south, after 21 Century Business Herald reported the country's four biggest lenders shed both lending and deposit. Meanwhile, the World Bank cautioned that China's slowdown is hurting growth in East Asia.
The Industrial and Commercial Bank of China and China Construction Bank both shed 0.2 percent to close at 4.18 yuan (66 US cents) and 4.48 yuan, respectively.
Premier Wen Jiabao said during a visit to Jiangsu Province this week that priority will be given to maintaining economic growth.
Cement producers gained on hopes new projects will boost demand for their products. Anhui Conch Cement Co edged up by 0.2 percent to close at 16.89 yuan.
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