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Market contracts on metal output curb and S&P ratings
By Hu Xiaocen |
January 16, 2012, Monday
|
Online Edition
Online Edition
SHANGHAI stocks sank for the fourth straight trading day on news of China's curb on nonferrous metals production till 2015 and Standard & Poor's cut of credit ratings of nine euro-zone countries last Friday.
The Shanghai Composite Index tumbled 1.71 percent, or 38.39 points, to 2,206.19 points at the market close. The turnover was 42.9 billion yuan (US$6.8 billion), the lowest in more than a week. Stocks fell across the board.
Li Jun, analyst at the Central China Securities, said the market rebound (last week) is not likely to repeat without the long-lasting support from turnover, which shrank from a five-week high last Wednesday with a 0.42 percent index slip, snapping a three-day gain.
The government will curb the production of nonferrous metals through 2015 due to concerns
about a bloated industry, worsening pollutions and an arduous task to save energy, according to a report on the website of Shanghai Metals Market.
Demand for nonferrous metals in the five year through 2015 will continue to grow at a slower pace, said the report. The production of ten nonferrous metals will be limited to 46 million tons, averaging 8 percent in annual growth, compared with 14.8 percent in the previous decade.
The production of copper and aluminum will be capped at 6.5 million and 24 million tons by 2015, averaging 7.3 percent and 8.8 percent in annual growth.
Nonferrous metal producers tumbled 5.25 percent today. Kingray New Materials Science & Technology Co plunged 10 percent to close at 11.53 yuan. Baotou Steel & Rare Earth Hi-tech Co fell 8.63 percent to 41.08 yuan. Xinjiang Joinworld Co slumped 9.93 percent to 13.69 yuan.
France and Austria lost their highest triple-A ratings after S&P announced its credit assessment results last Friday. While the ratings of France and Austria were lowered to AA+, Italy, Spain and Portugal saw their ratings lowered by two notches.
S&P said the downgrade was mainly because European leaders' recent policies and measures failed to address to the ongoing systematic stresses in the euro-zone. In addition, the EU summit last month didn't reach a breakthrough to solve the financial problems.
The news dimmed investor confidence in the A-share market as Europe is China's biggest export market. Investors are worried that Europe's deteriorating debt crisis might further drag down China's economy.
Shipping companies declined. China Shipping Container Lines lost 3.5 percent to 2.48 yuan. China Cosco Holdings Co, Asia's largest shipping line, fell 2.23 percent to 4.38 yuan.
The Shanghai Composite Index tumbled 1.71 percent, or 38.39 points, to 2,206.19 points at the market close. The turnover was 42.9 billion yuan (US$6.8 billion), the lowest in more than a week. Stocks fell across the board.
Li Jun, analyst at the Central China Securities, said the market rebound (last week) is not likely to repeat without the long-lasting support from turnover, which shrank from a five-week high last Wednesday with a 0.42 percent index slip, snapping a three-day gain.
The government will curb the production of nonferrous metals through 2015 due to concerns
about a bloated industry, worsening pollutions and an arduous task to save energy, according to a report on the website of Shanghai Metals Market.
Demand for nonferrous metals in the five year through 2015 will continue to grow at a slower pace, said the report. The production of ten nonferrous metals will be limited to 46 million tons, averaging 8 percent in annual growth, compared with 14.8 percent in the previous decade.
The production of copper and aluminum will be capped at 6.5 million and 24 million tons by 2015, averaging 7.3 percent and 8.8 percent in annual growth.
Nonferrous metal producers tumbled 5.25 percent today. Kingray New Materials Science & Technology Co plunged 10 percent to close at 11.53 yuan. Baotou Steel & Rare Earth Hi-tech Co fell 8.63 percent to 41.08 yuan. Xinjiang Joinworld Co slumped 9.93 percent to 13.69 yuan.
France and Austria lost their highest triple-A ratings after S&P announced its credit assessment results last Friday. While the ratings of France and Austria were lowered to AA+, Italy, Spain and Portugal saw their ratings lowered by two notches.
S&P said the downgrade was mainly because European leaders' recent policies and measures failed to address to the ongoing systematic stresses in the euro-zone. In addition, the EU summit last month didn't reach a breakthrough to solve the financial problems.
The news dimmed investor confidence in the A-share market as Europe is China's biggest export market. Investors are worried that Europe's deteriorating debt crisis might further drag down China's economy.
Shipping companies declined. China Shipping Container Lines lost 3.5 percent to 2.48 yuan. China Cosco Holdings Co, Asia's largest shipping line, fell 2.23 percent to 4.38 yuan.
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