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Stocks drop over concern about economic slowdown
By Lu Nengneng |
April 26, 2012, Thursday
|
Online Edition
Online Edition
SHANGHAI'S stock market edged down today as investors continued to worry about China's economic slowdown.
The key benchmark Shanghai Composite Index declined 0.09 percent to 2,404.7 points after dropping as much as 0.56 percent in early trading. Turnover stood at 104.8 billion (US$16.6 billion).
Tu Jun, strategy analyst at Shanghai Securities, said in a note that the recent market rebound is largely based on expectations that monetary policy will be loosened to halt the economic downturn.
But he stressed that investors tend to overestimate the impact of policy fine-tuning, which is supposed to ease current economic problems rather than cure them.
The central bank hasn't reduced the bank reserve requirement ratio as many had expected and liquidity concerns dragged down banks despite an estimated 19 percent year-on-year increase in their combined first-quarter profits. China Construction Bank lost 0.4 percent to 4.79 yuan while Industrial and Commercial Bank of China dipped 0.7 percent to 4.39 yuan. Both lenders will release first quarter results tomorrow.
Property developers, which face cash flow issues as housing market curbs extend, also fell. Shanghai New Huangpu Real Estate slumped 3.4 percent to 10.66 yuan. Beijing Huaye Real estate dropped 1.9 percent to 10.76 yuan.
Brokers bucked the downward trend on hope that pension funds will soon be channeled into the market as the Ministry of Human Resources and Social Securities is reportedly working on the details of a nationwide pension investment plan.
Industrial Securities rose 1.8 percent to 12.4 yuan. Haitong Securities increased 1.2 percent to 12.02 yuan.
The key benchmark Shanghai Composite Index declined 0.09 percent to 2,404.7 points after dropping as much as 0.56 percent in early trading. Turnover stood at 104.8 billion (US$16.6 billion).
Tu Jun, strategy analyst at Shanghai Securities, said in a note that the recent market rebound is largely based on expectations that monetary policy will be loosened to halt the economic downturn.
But he stressed that investors tend to overestimate the impact of policy fine-tuning, which is supposed to ease current economic problems rather than cure them.
The central bank hasn't reduced the bank reserve requirement ratio as many had expected and liquidity concerns dragged down banks despite an estimated 19 percent year-on-year increase in their combined first-quarter profits. China Construction Bank lost 0.4 percent to 4.79 yuan while Industrial and Commercial Bank of China dipped 0.7 percent to 4.39 yuan. Both lenders will release first quarter results tomorrow.
Property developers, which face cash flow issues as housing market curbs extend, also fell. Shanghai New Huangpu Real Estate slumped 3.4 percent to 10.66 yuan. Beijing Huaye Real estate dropped 1.9 percent to 10.76 yuan.
Brokers bucked the downward trend on hope that pension funds will soon be channeled into the market as the Ministry of Human Resources and Social Securities is reportedly working on the details of a nationwide pension investment plan.
Industrial Securities rose 1.8 percent to 12.4 yuan. Haitong Securities increased 1.2 percent to 12.02 yuan.
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