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Shanghai shares fall on profit-taking, jitters over new data
By Ye Zhen |
July 12, 2013, Friday
|
Online Edition
Online Edition
SHANGHAI stocks closed lower today after four days of gains, dragged by heavyweights as investors ran for profit-taking amid fear that China's economic data due out next Monday will be disappointing.
The key Shanghai Composite Index fell 33.50 points, or 1.62 percent, to 2,039.49 with a turnover of 103 billion yuan (US$16.9 billion) at the trading close. The index gained 1.61 percent this week.
Heavyweight coal miners, non-ferrous metals producers and financials retreated the most after a two-day rally on stimulus expectations.
Market analysts said there was some profit-taking going on because investors doubted the rally would take hold because the economic fundamentals remained weak.
China is scheduled to release a set of economic data including the second-quarter GDP on Monday.
Market sentiment was also dampened by the remarks of Lou Jiwei, the finance minister, yesterday that he is confident China will achieve a 7-percent expansion this year. The figure is lower than the official growth target of 7.5 percent, fueling speculations that the central government may have lowered this year's economic goal.
Deutsche Bank today cut its 2013 China growth forecast to 7.6 percent, from 7.9 percent, but remained optimistic about the outlook in 2014.
Ma Jun, chief economist for Greater China at Deutsche Bank, attributed the deceleration to a drop in producer prices, a lack of confidence among enterprises, and the recent liquidity crunch.
Wintime Energy Co lost 3.7 percent to 6.24 yuan. Shanxi Lu'an Environmental Energy Development Co fell 4.6 percent to 11.72 yuan. Inner Mongolia Baotou Steel Rare-earth (Group) Hi-tech Co, China's biggest producer of rare earth materials, declined 3.2 percent to 24.75 yuan.
Lenders slumped after China Securities Journal reported that the government may cancel the floor on lending rates, a move that could cut short-term interest margins. China Merchants Bank Co slipped 4.4 percent to 11.62 yuan. Shanghai Pudong Development Bank Co dropped 4.2 percent to 8.49 yuan.
The key Shanghai Composite Index fell 33.50 points, or 1.62 percent, to 2,039.49 with a turnover of 103 billion yuan (US$16.9 billion) at the trading close. The index gained 1.61 percent this week.
Heavyweight coal miners, non-ferrous metals producers and financials retreated the most after a two-day rally on stimulus expectations.
Market analysts said there was some profit-taking going on because investors doubted the rally would take hold because the economic fundamentals remained weak.
China is scheduled to release a set of economic data including the second-quarter GDP on Monday.
Market sentiment was also dampened by the remarks of Lou Jiwei, the finance minister, yesterday that he is confident China will achieve a 7-percent expansion this year. The figure is lower than the official growth target of 7.5 percent, fueling speculations that the central government may have lowered this year's economic goal.
Deutsche Bank today cut its 2013 China growth forecast to 7.6 percent, from 7.9 percent, but remained optimistic about the outlook in 2014.
Ma Jun, chief economist for Greater China at Deutsche Bank, attributed the deceleration to a drop in producer prices, a lack of confidence among enterprises, and the recent liquidity crunch.
Wintime Energy Co lost 3.7 percent to 6.24 yuan. Shanxi Lu'an Environmental Energy Development Co fell 4.6 percent to 11.72 yuan. Inner Mongolia Baotou Steel Rare-earth (Group) Hi-tech Co, China's biggest producer of rare earth materials, declined 3.2 percent to 24.75 yuan.
Lenders slumped after China Securities Journal reported that the government may cancel the floor on lending rates, a move that could cut short-term interest margins. China Merchants Bank Co slipped 4.4 percent to 11.62 yuan. Shanghai Pudong Development Bank Co dropped 4.2 percent to 8.49 yuan.
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