Stocks decline as PMI drops
By Feng Jianmin |
July 2, 2011, Saturday
|
Print Edition
Print Edition
SHANGHAI equities dropped yesterday after a key manufacturing index dropped to the lowest level in 28 months.
The Shanghai Composite Index lost 0.1 percent to close at 2,759.36. The benchmark was up 0.5 percent this week.
China's official Purchasing Managers' Index dropped to 50.9 percent in June, the lowest since February 2009, the China Federation of Logistics and Purchasing said in a statement yesterday.
"The index is lower than the market expectations of 51.5 percent," the China International Capital Corp said in a report. "Flood in south China and the current tight liquidity are limiting manufacturing expansion in the mid-term."
Large banks dropped on worries about sour debt. The Industrial and Commercial Bank of China lost 1.8 percent to 4.38 yuan.
Chinese banks had their earnings growth forecasts for this year cut to 25.9 percent from 28 percent at Shenyin and Wanguo Securities Co. Banks need to make an additional 48.8 billion yuan (US$7.5 billion) of provisions for lending to local government financing vehicles in 2011 and 2012, analysts led by Dong Liang wrote in a report yesterday.
The Shanghai Composite Index lost 0.1 percent to close at 2,759.36. The benchmark was up 0.5 percent this week.
China's official Purchasing Managers' Index dropped to 50.9 percent in June, the lowest since February 2009, the China Federation of Logistics and Purchasing said in a statement yesterday.
"The index is lower than the market expectations of 51.5 percent," the China International Capital Corp said in a report. "Flood in south China and the current tight liquidity are limiting manufacturing expansion in the mid-term."
Large banks dropped on worries about sour debt. The Industrial and Commercial Bank of China lost 1.8 percent to 4.38 yuan.
Chinese banks had their earnings growth forecasts for this year cut to 25.9 percent from 28 percent at Shenyin and Wanguo Securities Co. Banks need to make an additional 48.8 billion yuan (US$7.5 billion) of provisions for lending to local government financing vehicles in 2011 and 2012, analysts led by Dong Liang wrote in a report yesterday.
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