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Stocks at 3-year low as slowdown seen to hit earnings
By Ye Zhen |
July 16, 2012, Monday
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Online Edition
Online Edition
SHANGHAI equity market plunged to the lowest level since March 2009 on Premier Wen Jiabao's warnings about the country's economic difficulties and concerns over company earnings.
The key Shanghai Composite Index fell 1.74 percent, or 37.94 points to settle at 2,147.95 points. Turnover was 62.7 billion yuan (US$10 billion) by the trading close.
"China's economy is still expanding at a rate within the government target range set at the beginning of the year," Wen said during a three-day tour in Chengdu, Sichuan Province. "But we should be clear that the economy has not entered a stable rebound trend, economic difficulties may continue for some time."
Property developers fell after Zhuhai city's attempt to relax property curbs was halted by the central government after only five hours of being announced. Poly Real Estate, China's second largest developer shrank 4.1 percent to 12.27 yuan. Gemdale Corporation retreated 2.8 percent to 6.70 yuan.
Investors' worries over company performance were intensified ahead of corporate earnings season. "The timing for a bottoming out in the market may be delayed as policies have no obvious effect for now," Haitong Securities said in a report today. "The market may continue a weak run in late July on companies' mid-year reports."
Electronics providers slumped after Suning Appliance Co, the nation's biggest electronics retailer said its net profit in the first half year may drop as much as 30 percent. Hisense Electric Co lost 5.5 percent to 9.05 yuan. Universal Scientific Industrial (Shanghai) Co skidded 6 percent to 11.14 yuan.
The key Shanghai Composite Index fell 1.74 percent, or 37.94 points to settle at 2,147.95 points. Turnover was 62.7 billion yuan (US$10 billion) by the trading close.
"China's economy is still expanding at a rate within the government target range set at the beginning of the year," Wen said during a three-day tour in Chengdu, Sichuan Province. "But we should be clear that the economy has not entered a stable rebound trend, economic difficulties may continue for some time."
Property developers fell after Zhuhai city's attempt to relax property curbs was halted by the central government after only five hours of being announced. Poly Real Estate, China's second largest developer shrank 4.1 percent to 12.27 yuan. Gemdale Corporation retreated 2.8 percent to 6.70 yuan.
Investors' worries over company performance were intensified ahead of corporate earnings season. "The timing for a bottoming out in the market may be delayed as policies have no obvious effect for now," Haitong Securities said in a report today. "The market may continue a weak run in late July on companies' mid-year reports."
Electronics providers slumped after Suning Appliance Co, the nation's biggest electronics retailer said its net profit in the first half year may drop as much as 30 percent. Hisense Electric Co lost 5.5 percent to 9.05 yuan. Universal Scientific Industrial (Shanghai) Co skidded 6 percent to 11.14 yuan.
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