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Stocks down as investors doubt 2012 soft landing
By Lu Nengneng |
December 27, 2011, Tuesday
|
Print Edition
Print Edition
SHANGHAI'S key stock index fell yesterday, heading toward an eighth consecutive week of retreat, as investors continued to question China's ability to engineer a soft economic landing next year.
The Shanghai Composite Index reversed last Friday's gains, sinking 0.7 percent to 2,190.11 points. The benchmark has tumbled over 22 percent this year amid concerns that sluggish exports, shrinking investment and weak consumption may slow down the country's economic growth.
Resource stocks slumped on worries over their excessive output in the face of falling global demand after China's export growth hit a nine-month low in November. Jiangxi Copper, the nation's biggest copper producer, slid 0.7 percent to 21.50 yuan. Yanzhou Coal Mining shed 2.1 percent to 21.13 yuan.
The railway sector paced the across-the-board retreat after the Ministry of Railway decided to cut investment in new infrastructure next year out of debt and safety concerns. CSR Corp, the country's biggest train maker, fell 7.3 percent to 4.42 yuan. Its main rival, China CNR, lost 4.3 percent to 4.28 yuan.
"As China's economy is skidding further toward a downturn, the government may ease financial policies to put it back on track. But there is rather limited room for policy fine-tuning, let alone their impact on the market, given the cautious tone set in big state-led investments such as rail construction," according to a note by Mu Qiguo, analyst at Huatai United Securities.
The Shanghai Composite Index reversed last Friday's gains, sinking 0.7 percent to 2,190.11 points. The benchmark has tumbled over 22 percent this year amid concerns that sluggish exports, shrinking investment and weak consumption may slow down the country's economic growth.
Resource stocks slumped on worries over their excessive output in the face of falling global demand after China's export growth hit a nine-month low in November. Jiangxi Copper, the nation's biggest copper producer, slid 0.7 percent to 21.50 yuan. Yanzhou Coal Mining shed 2.1 percent to 21.13 yuan.
The railway sector paced the across-the-board retreat after the Ministry of Railway decided to cut investment in new infrastructure next year out of debt and safety concerns. CSR Corp, the country's biggest train maker, fell 7.3 percent to 4.42 yuan. Its main rival, China CNR, lost 4.3 percent to 4.28 yuan.
"As China's economy is skidding further toward a downturn, the government may ease financial policies to put it back on track. But there is rather limited room for policy fine-tuning, let alone their impact on the market, given the cautious tone set in big state-led investments such as rail construction," according to a note by Mu Qiguo, analyst at Huatai United Securities.
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