Shares dip after drop in PMI’s reading
Print Edition
Shanghai stocks dipped yesterday after data showed China’s manufacturing sector may have contracted in January for the first time in six months despite a cash injection by the central bank.
The Shanghai Composite Index shed 0.47 percent, or 9.57 points, to 2,042.18.
HSBC’s Flash China Purchasing Managers’ Index, a preliminary gauge of manufacturing activity slanted toward private and export-oriented firms, fell to 49.6 this month from the final figure of 50.5 in December, HSBC Holdings Plc said yesterday.
The index fell below the 50 threshold that separates expansion from contraction for the first time in six months.
Zhang Zhiwei, chief China economist with Nomura Holdings Inc, said the weak PMI suggested that the rising interest rates since June 2013 have started to impact the real economy.
Nomura expects China’s economic growth to slow in the first half of 2014 and bottom in the second quarter at 7.1 percent.
The market declined despite the liquidity injection of 120 billion yuan (US$19.7 billion) by the People’s Bank of China into the banking system yesterday via 21-day reverse repurchase agreements. The central bank pumped in 255 billion yuan on Tuesday.
Coal miners fell the most, with Shanxi Lu’an Environmental Energy Development Co off 3.1 percent to 9.04 yuan. Yang Quan Coal Industry (Group) Co lost 2.2 percent to 6.27 yuan.
Lenders also retreated, with China Minsheng Banking Corp shedding 1.4 percent to 7.05 yuan. Shanghai Pudong Development Bank fell 1.3 percent to 9.22 yuan.
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