Shares dip as global markets tumble
By Feng Jianmin |
August 20, 2011, Saturday
|
Print Edition
Print Edition
SHANGHAI'S key stock index yesterday dropped for the fourth straight day, taking its cue from global markets that tumbled as concerns over a worsening economic outlook weighed on US investors.
The Shanghai Composite Index fell 1 percent to 2,534.36 points. The index dropped 2.3 percent this week, its fifth consecutive weekly decline. It was the longest stretch of weekly losses since December 2010 as speculation continues that the central bank will not loosen its monetary stance under inflationary pressure and that slower economic growth both domestically and globally may crimp corporate earnings.
Other Asian markets also dropped yesterday after the Dow Jones Industrial Average plummeted 3.7 percent on Thursday as data showed worse-than expected industrial expansion and poor home sales. Hong Kong's Hang Seng Index lost 3.1 percent to 19,399.92 points, and Japan's Nikkei 225 Stock Average dropped 2.5 percent.
"Investors should be cautious about cyclical shares, taking into consideration slower economic growth," said Kou Wenhong, an analyst at China Natural Asset Management Co.
He forecast the Shanghai stock market will remain weak in the short term, but recommended consumer-related shares as a safe haven.
"Consumption will definitely be the main driver of the economy," Kou said.
Jiangxi Copper Co and China Shenhua Energy Co led a retreat in commodity stocks after oil and metal prices slid. Jiangxi Copper lost 2.1 percent to 31.88 yuan. China Shenhua dropped 1.8 percent to close at 25.59 yuan.
The Shanghai Composite Index fell 1 percent to 2,534.36 points. The index dropped 2.3 percent this week, its fifth consecutive weekly decline. It was the longest stretch of weekly losses since December 2010 as speculation continues that the central bank will not loosen its monetary stance under inflationary pressure and that slower economic growth both domestically and globally may crimp corporate earnings.
Other Asian markets also dropped yesterday after the Dow Jones Industrial Average plummeted 3.7 percent on Thursday as data showed worse-than expected industrial expansion and poor home sales. Hong Kong's Hang Seng Index lost 3.1 percent to 19,399.92 points, and Japan's Nikkei 225 Stock Average dropped 2.5 percent.
"Investors should be cautious about cyclical shares, taking into consideration slower economic growth," said Kou Wenhong, an analyst at China Natural Asset Management Co.
He forecast the Shanghai stock market will remain weak in the short term, but recommended consumer-related shares as a safe haven.
"Consumption will definitely be the main driver of the economy," Kou said.
Jiangxi Copper Co and China Shenhua Energy Co led a retreat in commodity stocks after oil and metal prices slid. Jiangxi Copper lost 2.1 percent to 31.88 yuan. China Shenhua dropped 1.8 percent to close at 25.59 yuan.
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