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Stocks drop for 3rd day on economic downturn threat
By Lu Neng Neng |
March 29, 2012, Thursday
|
Online Edition
Online Edition
SHANGHAI'S stock market dropped for the third consecutive day today as investor sentiment remained weak in the face of a looming economic downturn.
The key benchmark Shanghai Composite Index fell 1.43 percent to a 10-week low of 2,252.16 points. Turnover stood at 68 billion yuan (US$ 10.8 billion).
The ongoing market turbulence that started four weeks ago has pared more than half the gains from a previous seven-week rally.
The worries over China's economic slowdown intensified after manufacturers reported a 5.2 percent year-on-year drop in their earnings for the first two months of this year earlier this week, and market observers recently predicted another slump in yuan funds accumulated from foreign exchange in March.
Lu Zhengwei, chief economist at Industrial Bank, said the Consumer Price Index, a key gauge of inflation, may rise 3.5 percent from a year earlier in March, which is 0.3 percentage point higher than in February. China's gross domestic product growth may continue to ease in the first quarter to 8.6 percent, compared with 8.9 percent in the fourth quarter last year. The potential price hike and the economic slowdown might have rekindled the worries over stagflation.
Material producers fell the most today as they will have to deal with oversupply if China's economy continues its downward track.
Jiangxi Copper tumbled 3.4 percent to 23.85. Zijin Mining Industry sank 2.61 percent to 4.1 yuan. Yanzhou Coal Mining dove 4.39 percent to 22.19 yuan. Sinopec, Asia's largest refiner, dropped 1.62 percent to 9.71 yuan.
Banks also lost, though slightly after market observers estimated new loans in March may reach 800 billion yuan, which is higher than that of last month. Bank of China lost 0.34 percent to 2.92 yuan. Industrial and Commercial Bank of China dipped 0.7 percent to 4.28 yuan.
The key benchmark Shanghai Composite Index fell 1.43 percent to a 10-week low of 2,252.16 points. Turnover stood at 68 billion yuan (US$ 10.8 billion).
The ongoing market turbulence that started four weeks ago has pared more than half the gains from a previous seven-week rally.
The worries over China's economic slowdown intensified after manufacturers reported a 5.2 percent year-on-year drop in their earnings for the first two months of this year earlier this week, and market observers recently predicted another slump in yuan funds accumulated from foreign exchange in March.
Lu Zhengwei, chief economist at Industrial Bank, said the Consumer Price Index, a key gauge of inflation, may rise 3.5 percent from a year earlier in March, which is 0.3 percentage point higher than in February. China's gross domestic product growth may continue to ease in the first quarter to 8.6 percent, compared with 8.9 percent in the fourth quarter last year. The potential price hike and the economic slowdown might have rekindled the worries over stagflation.
Material producers fell the most today as they will have to deal with oversupply if China's economy continues its downward track.
Jiangxi Copper tumbled 3.4 percent to 23.85. Zijin Mining Industry sank 2.61 percent to 4.1 yuan. Yanzhou Coal Mining dove 4.39 percent to 22.19 yuan. Sinopec, Asia's largest refiner, dropped 1.62 percent to 9.71 yuan.
Banks also lost, though slightly after market observers estimated new loans in March may reach 800 billion yuan, which is higher than that of last month. Bank of China lost 0.34 percent to 2.92 yuan. Industrial and Commercial Bank of China dipped 0.7 percent to 4.28 yuan.
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