Shares drop as investors turn nervous
Print Edition
SHANGHAI stocks fell the most in more than a week yesterday as a drop in the yuan and rising economic risks weighed on investor sentiment.
The Shanghai Composite Index lost 1.4 percent, or 28.25 points, to 1,993.48.
The yuan weakened 0.5 percent to 6.2275 per dollar yesterday, the fifth straight day it has fallen, after the People’s Bank of China set the central parity at 6.1460, up from 6.1351 on Wednesday.
The yuan has declined more than 3 percent from a record of 6.04 on January 14, triggering fears that the depreciating currency will lead to a capital outflow.
“Yuan depreciation added to market concerns about liquidity outlook,” Haitong Securities said in a note yesterday.
Meanwhile, concerns over the Chinese economy rose after Goldman Sachs slashed its forecast for economic growth to 7.3 percent this year from 7.6 percent. It estimated China’s economy to expand 7.6 percent in 2015, down from 7.8 percent.
The investment bank said trade and consumption, which were expected to support the growth, disappointed in the first two months of this year.
Investment banks, including JPMorgan, UBS and Nomura, have cut their growth projections for the world’s second-largest economy in the past few weeks.
Small-cap shares of media firms and electronics shed the most after their peers fell on the Shenzhen market.
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