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Shanghai index dips as investors fret about economy
By Hu Xiaocen |
March 11, 2013, Monday
|
Online Edition
Online Edition
SHANGHAI stocks dropped for the third consecutive trading day today as a slowdown in manufacturing and lower new lending sparked worries about the economy.
The Shanghai Composite Index fell 0.35 percent to 2,310.59 points, making it the longest losing streak in three months.
"A sign of caution came from China over the weekend, as data pointed to an unexpected slowdown of growth in manufacturing in the first two months," Dariusz Kowalczyk, senior economist at Credit Agricole in Hong Kong, said in a research note today.
In the first two months, China's manufacturing output expanded 9.9 percent from a year earlier, down from December's 10.3 percent.
"Moreover, lower than anticipated new lending and overall social financing indicate more deceleration later in the year. At the same time, the CPI surged last month by more than consensus had it, suggesting that the need to curb prices may well lead to monetary tightening and additional downward pressure on growth," he said.
New lending dropped to 620 billion yuan (US$98.7 billion) in February from a three-year high of 1.07 trillion yuan in January and 710.7 billion yuan in February 2012, according to the People's Bank of China.
Most lenders fell today after the central bank reported lower lending by commercial lenders in February. Bank of Communications, China's fifth-biggest lender, shed 1 percent to 4.74 yuan. Shanghai Pudong Development Bank slumped 2.2 percent to close at 10.47 yuan. China Minsheng Banking Co declined 3.2 percent to 10.22 yuan.
The Shanghai Composite Index fell 0.35 percent to 2,310.59 points, making it the longest losing streak in three months.
"A sign of caution came from China over the weekend, as data pointed to an unexpected slowdown of growth in manufacturing in the first two months," Dariusz Kowalczyk, senior economist at Credit Agricole in Hong Kong, said in a research note today.
In the first two months, China's manufacturing output expanded 9.9 percent from a year earlier, down from December's 10.3 percent.
"Moreover, lower than anticipated new lending and overall social financing indicate more deceleration later in the year. At the same time, the CPI surged last month by more than consensus had it, suggesting that the need to curb prices may well lead to monetary tightening and additional downward pressure on growth," he said.
New lending dropped to 620 billion yuan (US$98.7 billion) in February from a three-year high of 1.07 trillion yuan in January and 710.7 billion yuan in February 2012, according to the People's Bank of China.
Most lenders fell today after the central bank reported lower lending by commercial lenders in February. Bank of Communications, China's fifth-biggest lender, shed 1 percent to 4.74 yuan. Shanghai Pudong Development Bank slumped 2.2 percent to close at 10.47 yuan. China Minsheng Banking Co declined 3.2 percent to 10.22 yuan.
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